Buckle up motorists: petrol surges by Rs13.55

The government on Wednesday implemented a significant hike in petrol prices by Rs13.55 per litre for the fortnight starting February 1-15.

This increase primarily aims to cover elevated taxes for current expenditures and address the surge in global oil prices.

Additionally, the price of high-speed diesel (HSD) rose by Rs2.75 per litre, as stated by the finance ministry. Following this adjustment, petrol will now be priced at Rs272.89 per litre, up from Rs259.34, while diesel will cost Rs278.96 per litre, up from Rs276.21.

Petrol is predominantly utilized in motorbikes and cars, while diesel is essential in the transport and agriculture sectors. Fluctuations in the price of High-Speed Diesel (HSD) directly affect consumers, leading to inflationary pressures. With gas load-shedding affecting the CNG sector in February, petrol, often an alternative, is expected to witness high demand.

In Punjab, there is no indigenous gas available for the CNG sector for several years and the entire CNG sector is supplied imported gas. The CNG outlets in other provinces also face load-shedding due to gas shortages in the country.

Also read: Govt likely to increase fuel price

“The government of Pakistan has decided to bring changes in the current prices of petroleum products during the fortnight starting from 1st February 2024, as recommended by the Oil and Gas Regulatory Authority (OGRA),” the finance ministry said in the statement.

Pakistan is a net importer of petroleum products, therefore, premium on oil imports also reflects in the prices. Import premium on petrol is estimated at $9.47 per barrel, whereas, the premium on HSD has been estimated to increase to $6.50 per barrel from $5.30 per barrel.

In the international market, the price of Brent had gone up by $5 per barrel to $83 from $78 per barrel on January 16. The HSD has also become costlier by about $2 per barrel to $97 from about $95 per barrel during the same period.

At present, the government is charging higher rate of petroleum levy on petroleum products up to Rs60 per litre. Therefore, the key reason of higher oil prices in Pakistan was the higher taxes, which the federal government was collecting to meet current expenditures.

The Russia and Ukraine war was also another reason that had led to higher oil prices in the international market that affected the prices on domestic level.