As July approaches, Pakistani motorists are bracing for an anticipated increase in petrol prices. The government is expected to raise petrol prices by approximately Rs7 per litre for the first half of July 2024. This comes after four consecutive price reductions, which had collectively provided relief amounting to Rs35 per litre.
This increase will be the first after a series of price cuts. In addition to the petrol price hike, the cost of high-speed diesel (HSD) is also set to rise by about Rs10.50 per litre, influenced by similar international market pressures.
Fiscal Adjustments and Petroleum Levy
In the recently announced budget for the fiscal year 2024-2025, the federal government has decided to increase the maximum petroleum levy by Rs20. This adjustment raises the levy to Rs80 per unit for both high-speed diesel oil (HSDO) and motor gasoline. The decision reflects the government’s strategy to align the petroleum levy with global price movements.
Final Price Determination
While the exact prices will be finalized based on the latest global market trends and the prevailing exchange rate, the official announcement is expected at midnight on June 30, 2024. The new prices will then take effect for the following 15 days.
Context of Previous Reductions
For some context, during the last pricing update, the government had reduced petrol and HSD prices for the third consecutive time. The price of petrol was reduced by Rs10.2, bringing it down to Rs258.16 per litre, while the price of HSD was cut by Rs2.33, setting it at Rs267.89 per litre.
Government Response to Global Oil Prices
This expected increase underscores the government’s response to volatile international oil prices. The adjustment aims to balance fiscal responsibilities with the need to maintain fair pricing for petroleum products. The move to align domestic fuel prices with international rates highlights the ongoing challenge of managing the economic impact of global oil price fluctuations on Pakistan’s economy.
Conclusion
The anticipated hike in petrol and diesel prices from July 1st is a reflection of the broader economic strategy to cope with global market dynamics. As the new prices take effect, consumers will need to adjust to the changes, while the government continues to navigate the complex landscape of international oil pricing and its domestic implications.