The federal government has decided to keep petroleum prices unchanged for the next fortnight, despite expectations of a price drop. A notification from the Finance Division confirmed that all fuel prices would remain at current levels.
Current Fuel Prices
The unchanged fuel rates are as follows:
- High-Speed Diesel (HSD): Rs258.64 per litre
- Petrol: Rs255.63 per litre
- Kerosene Oil: Rs168.12 per litre
- Light Diesel Oil (LDO): Rs153.34 per litre
Prime Minister’s Announcement
Prime Minister Shehbaz Sharif announced that fuel prices would remain the same while the government works on a relief package to reduce electricity prices. The Prime Minister’s Office stated that financial savings from international oil price fluctuations would be redirected toward lowering electricity costs. The relief package, expected in the coming weeks, aims to ease inflation and provide economic relief.
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Expected Fuel Price Reduction
The government’s decision comes after reports suggested that petroleum prices could have fallen by up to Rs14 per litre due to declining global oil prices and import premiums. Estimates indicated:
- Petrol could have dropped by Rs14 per litre
- HSD by Rs8 per litre
- Kerosene oil by Rs10 per litre
- LDO by Rs7 per litre
These reductions were anticipated due to a $3 per barrel decrease in Brent crude oil prices over the last ten days.
Government’s Financial Strategy
An official source revealed that authorities considered absorbing part of the price cushion to increase the petroleum levy or impose a carbon tax. This move aimed to secure an additional $1 billion from the International Monetary Fund (IMF) for climate adaptation and mitigation.
Currently, the government collects about Rs76 per litre in taxes on petrol and HSD. While the General Sales Tax (GST) remains at zero, a petroleum development levy (PDL) of Rs60 per litre is applied to both fuels. Under existing laws, this levy can be increased to Rs70 per litre.
In addition, the government imposes a Rs16 per litre customs duty on petrol and HSD, regardless of local production or imports. Oil companies and dealers also charge around Rs17 per litre in distribution and sales margins.
Impact on Consumers and Economy
Petrol prices directly impact motorists, rickshaw drivers, and two-wheeler owners, affecting the middle and lower-income groups. HSD, widely used in heavy transport vehicles, trains, and agricultural machinery, plays a key role in inflation by influencing the cost of food and essential goods.
By maintaining fuel prices, the government aims to provide economic stability. However, the upcoming electricity relief package will determine whether the public truly benefits from the decision.
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