Expected increase in prices of petrol & high-speed diesel
The public may once again face a wave of inflation before the beginning of October, as the expected increase in prices of petrol & high-speed diesel is estimated at Rs 2 to 3 per liter. This increase is coming in the context of the recent fluctuations in crude oil prices in the global market, which is leading to a review of prices for the government.
Current ex-depot prices
Currently, the ex-depot price of petrol in Pakistan is Rs 264.61 per liter, while the price of high-speed diesel is Rs 272.77 per liter. These prices have recorded a net increase of about Rs 13 per liter since mid-May, which is a cause of concern for the common citizens.
Expected increase
According to official sources, the following price increases are expected for the first fortnight of October:
- High Speed Diesel (HSD): Rs 2.50 per litre (about 1% increase)
- Petrol: Rs 1.90 to Rs 2.00 per litre
- Kerosene oil: Rs 4.50 per litre
- Light Diesel Oil: Rs 1.75 per litre
This increase may seem insignificant, but in the current inflationary environment, it will have a direct impact on the pockets of the public.
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Overall price change since May
The prices of petroleum products have continuously increased over the past few months.
The price of high-speed diesel increased by Rs 27 per litre between May and August.
Although there was a partial reduction of about Rs 13 per litre in recent weeks, transport fares have not been reduced.
Potential Impact on the Public
Petrol is commonly used in motorcycles, rickshaws, small vehicles, and private transport.
This particularly affects the middle and low-income groups, who rely on petrol for their daily commute.
On the other hand, high-speed diesel is mostly used in heavy vehicles, trains, freight trucks, and agricultural machinery.
Its rise in price is expected to lead to an increase in food prices, as transportation becomes more expensive.
This is why diesel is seen as an inflationary product.
Current Status of Taxes and Levies
Currently, the government is not imposing General Sales Tax (GST) on petroleum products, but several other taxes are applicable to the public:
Petroleum Levy:
- On Diesel: Rs. 79.50 per liter
- On Petrol and High Octane: Rs. 80.52 per liter (including CSL of Rs. 2.50)
Customs Duty:
- Approximately Rs. 16 to 17 per liter on both petrol and diesel
- This duty is applicable equally whether imported or domestic.
All these levies and taxes lead to an increase in the overall price, the burden of which is indirectly borne by the public.
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Current Prices and Expected Increase in Petroleum Products
| Product | Current Ex-Depot Price (PKR/Litre) | Expected Increase (PKR/Litre) | Total Increase Since May (PKR) |
|---|---|---|---|
| Petrol | 264.61 | 1.90 – 2.00 | Approx. 13 PKR |
| High-Speed Diesel (HSD) | 272.77 | Approx. 2.50 | Approx. 13 PKR |
| Kerosene Oil | Not Available | 4.50 | Not Available |
| Light Diesel Oil (LDO) | Not Available | 1.75 | Not Available |
Applicable Taxes and Levies on Petroleum Products
| Tax/Levy Type | Petrol (PKR/Litre) | Diesel (PKR/Litre) |
|---|---|---|
| Petroleum Levy | 80.52 (including CSL) | 79.50 |
| Customs Duty | 16 – 17 | 16 – 17 |
| General Sales Tax (GST) | Not Applicable | Not Applicable |
Transport Sector Response
Transporters had increased fares significantly after the price hike between May and August. However, despite some reduction in prices in recent weeks, there has been no significant reduction in fares.
This situation has left the public in a double financial predicament ; on the one hand, petrol is expensive, on the other hand, rents remain unchanged.
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