Petrol, diesel witness massive price hikes

Interim govt jacks up petrol price by Rs40.93 per litre in just two gos

ISLAMABAD:

In another massive hike in the rates of petroleum products on Friday after the interim set-up took over the reins in August, the price of petrol was increased by Rs26.02 per litre while that of high-speed diesel (HSD) by Rs17.34 per litre.

On Thursday, speculations were rife that the prices of petrol and HSD could go up by Rs14 and Rs16 per litre, respectively for the next fortnight, while the kerosene oil price would also get costlier by about Rs10 per litre. However, the increase was far more than expected.

pic.twitter.com/utyePZMGme

— Ministry of Finance (@FinMinistryPak) September 15, 2023

A finance ministry statement said, “Owing to the increasing trend of petroleum prices in the international market, the government has decided to revise the existing consumer prices.”

After the hike, the price of petrol reached a historic high of Rs331.38 per litre while HSD is available at Rs329.18 per litre. The new prices were effective from midnight.

The caretaker government had on Sept 1 authorised price hikes for both petrol and diesel, propelling petrol prices to surpass the historic Rs300 per litre threshold for the first time in the country's history.

This new increase will further burden the citizens who are already grappling with ongoing economic challenges, including soaring inflation, rupee depreciation against the dollar, inflated utility bills, and escalating prices of essential commodities.

The prices of kerosene oil and light diesel oil (LDO) were not announced.

Read more: Petrol price likely to go up by Rs16 per litre

Diesel is widely used in transport and agriculture sectors, and therefore, any increase in its price causes a massive inflationary impact.

Kerosene oil is used for cooking purposes in remote areas, especially in the northern parts of the country where the LPG is not available for cooking. Pakistan Army is also its key user in these areas.

Meanwhile, the benchmark international Brent prices went beyond $92 per barrel on Wednesday against $88 in the first week of September.

On Thursday, sources said that the government was all set to pass on to the consumers about 88 paisas per litre impact of increase in sale margins for petroleum dealers and marketing companies already approved by the Economic Coordination Committee (ECC) of the Cabinet last week.

The import parity price for petrol, diesel, and kerosene oil had increased by about Rs13, Rs14 and Rs10 per litre, respectively since Sept 1, but sale prices were estimated to go up by Rs13, Rs16 and over Rs10 per litre as per product imports by the Pakistan State Oil. Jet fuels are also estimated to be costlier by Rs10 per litre.

Similarly, the sources said, the petrol and diesel prices were estimated to cross Rs320 and Rs325 per litre, respectively. The kerosene oil rate would be on the higher side of Rs240 per litre.

The increase in the prices of petroleum products came on the heels of over 27.4 per cent increase in the August rate of inflation that would also have a lag effect on general prices in the country over the coming days and weeks.