Petroleum Product Prices Set to Rise by Rs 4 Per Litre

It’s worth noting that on February 15, the interim government increased the price of petrol by Rs 2.73 per liter, bringing it to Rs 275.73 per liter. Similarly, the price of high-speed diesel increased by Rs 8.37 per liter, reaching Rs 287.33 per liter.
According to a report in the Dawn newspaper, insider sources have indicated that global petrol and diesel prices have risen by 10 to 50 cents per barrel over the last 15 days. Additionally, Pakistan State Oil (PSO) is facing higher import premiums on petrol, leading to a likely increase in petrol prices by 3 to 4 rupees per liter and diesel prices by one to one and a half rupees per liter. However, light diesel oil prices are expected to remain unchanged.
In the past two weeks, gasoline prices have increased by approximately $0.50 per barrel to $90.78, while diesel prices have slightly decreased by about 8 cents per barrel to $101.05.
The rupee’s stability has been noted, with PSOs paying higher premiums to secure petrol cargoes, but no change has been observed for diesel.
The government is currently levying a development levy of Rs 60 per liter on both petrol and diesel, the maximum allowed by law, as part of its commitment to the International Monetary Fund (IMF). The government aims to collect Rs 869 billion from petroleum levy in the current fiscal year but has only managed to collect Rs 475 billion during the first half (July-December). The revised target for the fiscal year has been raised to Rs 920 billion.
Petrol is primarily used in private transport, small vehicles, rickshaws, and motorcycles, impacting the budgets of low and middle-income earners directly. Conversely, diesel prices affect inflation more significantly due to its use in heavy transport, trains, agricultural machinery, and its impact on food prices.
The government imposes taxes of approximately Rs 82 per liter on both petrol and diesel, in addition to a petroleum development levy of Rs 60 per liter and customs duties ranging from 17 to 20 rupees per liter. Petrol and diesel contribute significantly to government revenue, with monthly sales totaling around 7 to 8 lakh tonnes, whereas kerosene consumption is only 10,000 tonnes per month.