The federal government on Friday once again raised the price of petrol by Rs. 13.18/liter and high-speed diesel by Rs. 13.80/liter, continuing its policy of delaying any potential relief when global prices fall and passing on the entire burden to the public if prices increase even marginally.
The new price of petrol, per a notification issued by the Petroleum Division, is now Rs. 310.71/liter, while diesel would cost consumers Rs. 323.30/liter. The prices came into effect from July 11 (today) and will remain in place for a week.
A separate notification issued by the Oil and Gas Regulatory Authority (OGRA) raised the price of kerosene oil by Rs. 11.19/liter, fixing its new rate at Rs. 242.33/liter.
Roughly a third of the consumer price is in the form of taxes and levies, as the government continues to utilize fuel sales as a revenue generator amidst deficiencies in the Federal Board of Revenue (FBR)’s performance. The latest price hikes reflects this, as the government has increased the petroleum levy on petrol from Rs. 70.36 to Rs. 80/liter for retail outlets, and from Rs. 79 to Rs. 88.64/liter for direct sales.
Similarly, the levy on premium HOBC has increased from Rs. 95.36 to Rs. 105/liter for retail outlets and from Rs. 97.51 to Rs. 107.15/liter for direct sales. The petroleum levy on kerosene oil remains unchanged at Rs. 20.36/liter, while light diesel oil has a levy of Rs. 15.84/liter. Furnace oil has a levy of Rs. 77/liter.
The latest hike follows a negligible decrease of prices last week, when the federal government had reduced the prices of petrol and high-speed diesel by Rs. 1.97/liter for one week.
The government recently also doubled the climate support levy, from Rs. 2.5 to Rs. 5/liter, with effect from July 1.
Analysts expect the latest increase to prove inflationary. High-speed diesel is primarily consumed by the transport and agriculture sectors, with even minor changes in price having a significant impact on freight charges and inflation. Petrol, mostly used by commuters and private vehicles, often impacts the middle and lower-middle classes.
Renewed tensions between the U.S. and Iran have caused increases to fuel prices globally, but levels remain below the peaks witnessed at the height of the conflict. Diesel in Pakistan peaked at Rs. 520.35/liter, while petrol hit an historic high of Rs. 458.41/liter.