ISLAMABAD: The federal government on Wednesday announced an increase in the price of petrol by Rs3.47 per litre, bringing it to Rs256.13 per litre, and high-speed diesel (HSD) by Rs2.61 per litre, now priced at Rs260.95 per litre, for the upcoming fortnight.
A press release from the Finance Division attributed the hike to fluctuations in the international oil market, though it did not address changes in kerosene and light diesel oil prices.
Insiders had earlier anticipated a Rs5-6 per litre hike in petrol and marginal increases for other fuels due to rising global crude oil prices, which saw a $1-2 per barrel surge after geopolitical tensions, including the threat of sanctions on Russian oil.
Petrol, heavily relied upon by private vehicles, motorbikes, and rickshaws, impacts middle and lower-income groups, while HSD, essential for heavy transport and agricultural machinery, carries broader inflationary effects.
Despite zero general sales tax (GST) on petroleum products, the government imposes a petroleum development levy of Rs60 per litre on petrol and HSD. Additional charges include Rs16 per litre customs duty and Rs17 per litre for distribution and sale margins. Luxury fuel, such as high-octane petrol, is subject to Rs50 per litre in levies.
With taxes and levies accounting for Rs76 per litre on both petrol and HSD, the price adjustments are likely to exacerbate the cost-of-living pressures and drive up inflation in essential goods and services.
