Fuel Prices in Pakistan Set to Rise: What You Need to Know

Jawad

13 Nov 2024

148

Fuel Prices in Pakistan Set to Rise: What You Need to Know

Pakistan is preparing for a significant rise in petroleum product prices, which is likely to intensify the country's ongoing economic difficulties. The upcoming price hike is mainly driven by the IMF’s recommendation to impose an 18% General Sales Tax (GST) on petroleum products and raise the Petroleum Development Levy (PDL) from Rs. 60 to Rs. 70 per liter. These changes, previously discussed in our blogs, are expected to place additional strain on consumers already struggling with high living costs.

Expected Price Surge

If the proposed increase is implemented, it is anticipated that the prices of petrol, diesel, kerosene oil, and light diesel oil will increase by up to Rs. 6 per liter, starting from November 16, 2024. Petrol prices are expected to rise by Rs. 2.58 per liter, while high-speed diesel (HSD) may see a rise of Rs. 5.91 per liter. Kerosene oil could also increase by Rs. 5.54 per liter, adding further pressure to the cost of living.

Current Petrol Price Status

As of October 31, 2024, petrol is priced at Rs. 248.38 per liter, and high-speed diesel (HSD) costs Rs. 255.14 per liter. These figures reflect recent price adjustments aimed at aligning with global oil market trends and meeting the government's fiscal targets. Currently, these prices are exempt from GST, although the PDL of Rs. 60 per liter remains in effect.

OGRA's Role and Government Approval

Oil companies have submitted their revised price calculations to the Oil and Gas Regulatory Authority (OGRA), which will forward the details to the government for final approval on November 15, 2024. The ultimate decision regarding the price increase will be made by the Prime Minister’s office. A substantial portion of the Fuel Prices in Pakistan is due to taxes, including a fixed tax of Rs. 76 per liter, meaning any further price hike will directly affect consumers' budgets, particularly for those relying on these fuels for daily transportation.

Global Oil Market Trends

Globally, Fuel Prices have experienced mixed trends. While Brent crude futures have seen a slight decline, US West Texas Intermediate (WTI) has shown a small increase. Overall, the global trend seems to be leaning toward a moderate rise in oil prices, which may contribute to higher domestic fuel costs. As the government struggles to balance economic stability with public needs, the upcoming petrol price increase remains a major concern. The question now is how the government will address the impact on the population and provide any necessary relief.

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