The caretaker government will likely raise petroleum product prices from February 1, 2024, for the first half of the month. This adjustment reflects recent market dynamics.
Factors Influencing Price Increase
Tensions in the Middle East, including Israeli actions in Gaza and attacks on Yemen’s Houthis, have impacted fuel prices. International markets have reacted sharply to these events, with petrol and diesel prices soaring by $6 and $3.7 per barrel, respectively. Consequently, ex-refinery prices in Pakistan for motor spirit (MS) petrol and high-speed diesel (HSD) have risen significantly.
The expected hike in MS petrol is Rs7.85 per litre, and in HSD, Rs2.06 per litre, after adjusting for exchange rate gains. However, kerosene prices might decrease.
The government currently imposes a Rs60 per litre Petroleum Development Levy (PDL) on petrol and HSD. Additional charges include the Internal Freight Equalisation Margin (IFEM), OMCs margin, and dealers’ margin.
The previous fortnight saw a Rs8 per litre reduction in petrol prices, while diesel rates remained unchanged. In the latest revision, kerosene oil and light diesel oil experienced slight rate decreases.
