Fuel Prices Rise for Second Consecutive Fortnight

Pakistan is preparing for another hike in fuel prices, with petrol and high-speed diesel (HSD) rates set to increase by Rs4-5 per litre from November 16. This marks the second consecutive fortnightly price rise. The increase is attributed to a rise in international oil prices and an import premium on petrol.

Sources indicate that international petrol prices have climbed by $1.7 per barrel, while HSD prices surged by $4.4 per barrel over the past two weeks. Additionally, the import premium on petrol has risen from $8.8 to $9.80 per barrel. With the current tax structure and exchange rate, petrol and HSD prices are projected to increase by up to Rs4 and Rs5 per litre, respectively.

Currently, the ex-depot prices of petrol and HSD stand at Rs248.38 and Rs255.14 per litre, respectively. The upcoming price increase will put additional strain on the middle and lower-middle classes, who rely on petrol for personal transportation. The transport sector, which predominantly uses HSD, will also face significant challenges, potentially leading to further inflationary pressures.

The government currently imposes taxes of around Rs76 per litre on petrol and HSD, consisting of Rs60 per litre in Petroleum Development Levy (PDL) and Rs16 per litre in customs duty. Despite the absence of General Sales Tax (GST), fuel sales remain a major source of government revenue.

This price hike is expected to have wide-ranging economic effects, worsening inflation and potentially slowing economic growth. Citizens are urged to brace for the price increase, effective from November 16.