As citizens are already under the burden of escalating electricity costs, the caretaker administration shocked the nation on Thursday by announcing a considerable surge in petrol and diesel prices by more than Rs14.
The Finance Division attributes this hike to the current global trajectory of petroleum prices coupled with fluctuations in exchange rates. As per the latest rates, petrol witnesses an increment of Rs14.91 for every litre, settling the new price at Rs305.36 per litre. Meanwhile, the high-speed diesel (HSD) sees a leap of Rs18.44, pushing its cost to a staggering Rs311.84 per litre.
The Struggling Local Currency
Challenges continue to mount as the local currency records its weakest performance ever. An eased stance on import restrictions amplifies the demand for the US dollar. Concurrently, concerns related to financing the nation’s existing account deficit further strain the financial environment. Since the inception of the caretaker government, the rupee’s valuation has plummeted by over Rs15 in the interbank market.
The interim government supervises a review of the International Monetary Fund (IMF) $3 billion arrangement and ensures a smooth run-up to the anticipated national elections, slated for November.
Industry insiders had already hinted at the potential price surge in petrol and diesel. According to experts familiar with petroleum pricing mechanisms, petrol and high-speed diesel were poised for a significant jump. The administration planned to revisit these rates on Thursday night, in line with the biweekly price assessment formula.
It’s worth noting that August already witnessed fuel price adjustments. On its first day, petrol rates were elevated by Rs19.95 per litre and diesel by Rs19.90 per litre. Subsequently, on August 16, the petrol price soared by Rs17.50 per litre, whereas high-speed diesel experienced an increase of Rs20 per litre.
