Fuel Prices in Pakistan Set to Rise: What You Need to Know

Posted on November 23, 2024 by News Desk

Fuel Prices in Pakistan Set to Rise: What You Need to Know

As global oil markets experience fluctuations, Pakistan is gearing up for another increase in petroleum product prices starting November 16, 2024. The expected price hike will further strain household budgets, impacting not only transportation costs but also everyday living expenses.

Projected Price Increases

According to reports, the price hike will affect petrol, high-speed diesel (HSD), kerosene oil, and light diesel oil (LDO). Here’s a breakdown of the expected changes:

  • Petrol: Increase of Rs 2.50 per liter.
  • High-Speed Diesel (HSD): Increase of Rs 5.91 per liter.
  • Kerosene Oil: Increase of Rs 5.54 per liter.
  • Light Diesel Oil (LDO): Increase of Rs 5.90 per liter.

These revised rates will remain in effect for 15 days, further stretching already tight household budgets as winter approaches.

The Process Behind the Adjustment

Oil companies have submitted their pricing calculations to the Oil and Gas Regulatory Authority (OGRA), which will finalize the recommendations by November 15, 2024. The government, in consultation with the Prime Minister, will approve the final rates.

The current tax structure includes a fixed levy of Rs 76 per liter on petrol and HSD, with Rs 60 allocated to the petroleum development levy and Rs 16 in customs duty. These taxes, combined with global market trends, heavily influence local fuel prices.

Global Oil Market Trends

On the international front, Brent crude futures recently dipped 1% to $71.82 per barrel, while US West Texas Intermediate (WTI) rose slightly to $68.07 per barrel. Despite these minor fluctuations, crude oil prices have dropped approximately 25% over the past month, reflecting significant adjustments in the global market.

However, specific indicators, such as petrol’s average price rising from $75.6 to $77.2 per barrel and HSD climbing to $88 from $83.6, have contributed to the upward pressure on local fuel costs. The import premium on petrol has also surged to $9.80 per barrel, further adding to the pricing challenges.

Impact on Households and Budgeting

The expected increase in fuel prices comes at a time when families are already grappling with high inflation and rising living costs. With ex-depot prices for petrol and HSD currently at Rs 248.38 and Rs 255.14 per liter, respectively, the adjustment will push transportation and operational costs higher.

For brides-to-be planning their weddings, this rise in costs could influence decisions around logistics, such as fuel for guest transportation and event-related travel. Budgeting for these unforeseen expenses will be crucial for ensuring a smooth wedding season amidst financial constraints.

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