Petrol and high-speed diesel (HSD) prices are set to rise by Rs1-4 per litre on February 29 due to adjustments in global prices, import costs, and exchange rates. Sources indicate that international market fluctuations and higher import premiums paid by Pakistan State Oil (PSO) have influenced these changes.
Consequently, petrol prices may increase by Rs3-4 per litre, with HSD seeing a Rs1-1.5 per litre hike, influenced by the final exchange rate. The US dollar weakened against the rupee by about 15 paise on February 28, while the prices of kerosene and light diesel oil should stay the same.
The government has reached its Rs60 per litre petroleum levy cap. Despite this, under International Monetary Fund commitments, it aims to collect Rs970bn by year-end, adjusting the target to Rs920bn by June. This levy collection stands at about Rs475bn for the first fiscal half.
Petrol and electricity significantly contribute to the 27.5% inflation rate as of January. Petrol affects middle and lower-class budgets and is widely used in private transport. Conversely, HSD, essential for heavy transport and agriculture, escalates food prices.
The government levies Rs82 per litre in taxes on petrol and HSD, with a Rs60 per litre petroleum development levy (PDL) and no general sales tax. Additionally, it imposes a Rs50 per litre levy on specific petrol types and Rs17-20 per litre in customs duty. Petrol and HSD, with monthly sales between 700,000 to 800,000 tonnes, are significant revenue sources, contrasting with the minimal demand for kerosene.
