ISLAMABAD (Dunya News) – The federal government has announced a whooping increase in petroleum prices for second fortnight of July 2024.
A notification issued by the government said the petrol price was increased by Rs9.99 to Rs275.60 per litre.
Similarly, the price of high-speed diesel was jacked up by Rs6.18 per litre, with new price fixing at Rs283.63 per litre.
The new prices will come into effect from July 16, 2024 till July 31, 2024.
The notification said there would be no change in the applicable duties and taxes, adding that they would remain at the existing level.
Prices of the two petroleum products were expected to increase by more than Rs7.60 and Rs3.50 because of higher global oil prices.
The prices of petrol and HSD had increased in the international market by about $4.4 and $2 per barrel, respectively, in the last fortnight.
The government has jacked up the maximum limit of petroleum development levy (PDL) to Rs70 per litre in the Finance Bill to collect Rs1.28 trillion in the current fiscal year against Rs960 billion collection during the previous year, almost Rs91bn higher than the Rs869bn budget target.
During the current fortnight, import premiums on both petrol and HSD have remained unchanged at $9.60 and $6.50 per barrel, respectively.
On the other hand, the rupee depreciated by about 17 paise against the dollar during the fortnight.
The government currently charges about Rs77 per litre tax on both petrol and HSD.
Although the general sales tax is zero on all petroleum products, the government charges Rs60 per litre PDL on both products, which normally impacts the masses.
The government is also charging about Rs17 customs duty on a litre of petrol and HSD, irrespective of their local production or imports.
Petroleum and electricity prices have been the key drivers of high inflation. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers.
On the other hand, an increase in diesel’s price is considered highly inflationary as it is mostly used in heavy transport vehicles and particularly adds to the prices of vegetables and other eatables.
This price hike is based on factors such as global oil prices, currency exchange rates, and financial considerations for the energy sector.
The estimated fuel price reductions are also based on the current tax structure and calculated with estimated $ exchange adjustment and the Inland Freight Equalization Margin (IFEM).
Petrol is mainly used for cars and motorcycles, while HSD powers heavy vehicles like trucks and buses, as well as industrial machinery.
Kerosene oil is essential for cooking and lighting in households without electricity, and LDO is used in industrial boilers, furnaces, and certain engines, particularly in the textiles, cement, and power generation sectors.
The increase in fuel prices is expected to add additional burden to the already burdened masses and this hike in oil prices will also cause inflation which is already skyrocketing.
New Petroleum Prices from 16th July, 2024. pic.twitter.com/epau2f0Wjq
— Ministry of Finance, Government of Pakistan (@Financegovpk) July 15, 2024