Petroleum Prices
ISLAMABAD: Petroleum prices, including those for high-speed diesel (HSD), petrol, and kerosene, are expected to rise by up to Rs6 per litre starting Friday, marking the next fortnightly price adjustment. This increase is primarily attributed to the recent uptrend in international oil prices.
According to informed sources, the ex-depot price of petrol is estimated to increase by Rs2-3 per litre, depending on final calculations as of January 31.
Similarly, kerosene and diesel prices are projected to rise by around Rs6 per litre. These price hikes are a result of the bullish trend observed in the global oil market, with Brent crude prices climbing by up to $2 per barrel in the past fortnight.
Internationally, the average price of high-speed diesel increased by more than $2.50 per barrel, while petrol saw a smaller increase of about 50 cents per barrel. The ex-refinery cost of kerosene also went up.
Additionally, the import premium for petrol rose by about 40 cents, reaching $8.84 per barrel, although the premium on diesel remained unchanged. The exchange rate has remained relatively stable during this period.
As of January 29, the latest calculations suggest that the price of HSD and kerosene may rise by approximately Rs5 to Rs6 per litre, while petrol is expected to see an increase of about Rs2 to Rs2.50 per litre.
Currently, the ex-depot price for petrol stands at Rs256.13 per litre, while HSD costs Rs260.95 per litre. The official rate for kerosene is Rs169.25 per litre, although it is often unavailable at this price in the market.
Petrol is widely used for private transport, including small vehicles, rickshaws, and two-wheelers, and the price increase directly impacts the budget of the middle and lower-middle classes.
High-speed diesel, on the other hand, is heavily used in the transport sector, including heavy vehicles, trains, and agricultural engines such as trucks, buses, tractors, and tube wells. As a result, diesel price increases are considered inflationary, particularly affecting the prices of vegetables and other essential goods.
The government currently charges about Rs76 per litre in taxes on both petrol and HSD. Despite the general sales tax (GST) being zero on petroleum products, the government imposes a Petroleum Development Levy (PDL) of Rs60 per litre on both.
Additionally, customs duty of about Rs16 per litre is charged, regardless of whether the products are locally produced or imported. Oil companies and their dealers also add around Rs17 per litre in distribution and sales margins. These additional charges contribute significantly to the overall cost of petroleum products, impacting consumers across various sectors.
