The persistent surge in energy rates is set to continue, with petroleum product prices expected to climb again later this week. This rise is attributed to the devaluation of the local currency coupled with escalating global oil prices.
Sources disclosed that anticipated price hikes for petrol and high-speed diesel (HSD) are in the range of Rs10-14 and Rs14-16 per litre, respectively, effective from September 15 for the subsequent two weeks. Furthermore, kerosene is projected to be pricier by around Rs10 per litre, considering the prevailing tax regimes and import parity pricing.
Implications on Middle and Lower-Middle-Class Budgets
Within the first half of the current month, the rupee witnessed a depreciation, initially hitting Rs304 against the dollar before settling below Rs300. However, this depreciation was offset as Brent crude prices soared past $92 per barrel on Wednesday, compared to $88 at the beginning of September, negating potential benefits from the exchange rate fluctuation.
The import parity pricing of petrol, diesel, and kerosene has risen by approximately Rs13, Rs14, and Rs10 per litre since the start of the month. This indicates a probable selling price increment of Rs13, Rs16, and above Rs10 per litre, in accordance with Pakistan State Oil’s product imports. A corresponding increment is anticipated for jet fuels by Rs10 per litre.
Consequently, petrol and diesel costs are expected to surpass Rs320 and Rs325 per litre, respectively, with kerosene potentially reaching beyond Rs240 per litre.
Petrol predominantly fuels personal transportation and smaller vehicles, directly affecting the financial planning of the middle and lower-middle-class segments. These augmentations in petroleum product prices follow a 27.4% inflation surge witnessed in August, a trend predicted to echo in the general pricing matrix in the forthcoming period.
Currently, while there is no GST levied on petroleum products, the government imposes substantial petroleum development levies and customs duties on various fuels, contributing to its revenue stream predominantly through significant monthly sales of petrol and HSD, as opposed to the relatively lower demand for kerosene.