ISLAMABAD (Dunya News/Web Desk) – Petroleum products are set to become expensive with effect from July 1 because of not only higher prices in international market but also the possible increase in taxes as the government is aiming at boosting revenue collection albeit through indirect taxation which directly impact the ordinary people instead of wealthier influential classes already enjoying a long list of exemptions.
It is believed that the petrol prices will jump by Rs8 per litre. However, the high-speed diesel prices are expected to witness even bigger hike of Rs10, as higher transportation costs will sustain inflation and further reduce purchasing power, thus worsening the existing cost of living crisis and maintaining higher cost of doing business.
At the same time, any further increase in inflation will slow the interest rate cut cycle which has just started, despite the fact the businessmen are clamouring for reducing the record high borrowing costs that have crippled the economy.
Meanwhile, calculations suggests that kerosene prices are to be hiked by Rs9.
The imminent increase in fuel prices will come after four consecutive fortnightly price cuts, as sources say the prices of petrol and diesel have increased in the international market by about $4.4 and $5.5 per barrel respectively.
As far as the taxes are concerned, the tool to be employed is the petroleum development levy (PDL), which has been increased from the existing level of Rs60 to Rs80 per litre in the Finance Bill 2024.
However, the PDL would be gradually increased depending on the pricing trend and, therefore, the consumers will feel the effects slowly.
Since May 1, the petrol prices are dropped by about Rs35 per litre to about Rs259 from about Rs294 on April 30.
Similarly, the diesel prices have been reduced by Rs22 per litre to Rs268 from over Rs290 in the second fortnight of April.