The federal government has increased petrol and diesel prices by raising the Petroleum Levy on petrol instead of passing on potential price relief to consumers. The revised fuel prices came into effect on July 11, with motorists now paying significantly more at filling stations across the country.
Under the new pricing, the ex-depot price of petrol has increased by Rs13.18 per litre, rising from Rs297.53 to Rs310.71 per litre. The price of High-Speed Diesel (HSD) has also gone up by Rs13.80 per litre, taking it to Rs323.30 per litre.
The latest increase was driven mainly by a revision in the Petroleum Levy on petrol. The government raised the levy by Rs9.64 per litre, increasing it from Rs70.36 to the budgeted maximum of Rs80 per litre. The Petroleum Levy on high-speed diesel remains unchanged at Rs70.82 per litre.
The revised pricing also includes changes to kerosene oil. According to the notification, the prescribed price of kerosene has been set at Rs234.06 per litre, while the maximum ex-depot sale price has been fixed at Rs242.33 per litre.
The increase in the Petroleum Levy is expected to boost government revenues. Based on an estimated daily petrol consumption of around 20 million litres, the additional levy could generate nearly Rs192.8 million in extra revenue every day. This translates into approximately Rs5.8 billion per month and close to Rs70 billion annually, depending on fuel sales.
The Petroleum Levy is one of the government’s largest non-tax revenue sources and plays an important role in meeting fiscal targets under the current budget framework. Officials expect the additional revenue to help strengthen public finances and reduce the fiscal deficit.
However, the latest fuel price increase is likely to place additional pressure on consumers and businesses. Higher fuel costs generally lead to increased transportation expenses, freight charges and industrial production costs, which can contribute to higher prices for essential goods and services.
The Oil and Gas Regulatory Authority (OGRA) issued the official notification implementing the revised petroleum prices under the Petroleum Products (Petroleum Levy) Rules, 1967, following directives from the Ministry of Energy. OGRA said the revised prices include the ex-refinery or import parity price, Petroleum Levy, dealer margin and distributor margin. The authority added that the maximum ex-depot prices apply to 23 designated locations, while additional freight charges may apply in areas beyond those locations according to the policies of Oil Marketing Companies.
