ISLAMABAD:
Just a week after consumers received relief at the pump, the federal government sharply hiked oil prices, increasing gasoline by Rs 13.18 per liter and high-speed diesel by Rs 13.80 per liter, amid a fresh surge in international crude oil prices triggered by escalating tensions between Iran and the United States.
The increase follows a new surge in global oil prices after new US strikes against Iran and a breakdown of ceasefire agreements on July 7 and 8. Brent crude climbed to around $77-78 per barrel, while US West Texas Intermediate (WTI) traded at $73.60 per barrel, prompting the government to pass on the higher cost of imports to domestic consumers.
According to a notification issued by the Petroleum Division, the price of high speed diesel (HSD) has been increased by Rs 13.80 per liter from Rs 309.50 to Rs 323.30 per litre.
Similarly, the price of petrol was increased by Rs 13.18 per liter from Rs 297.53 to Rs 310.71 per litre.
The government also increased petroleum tax on petrol from Rs 70.36 to Rs 80 per liter for retail outlets and from Rs 79 to Rs 88.64 for direct sales. The levy on premium HOBC/MS (95 RON) has been increased from Rs95.36 to Rs105 per liter for retail outlets and from Rs97.51 to Rs107.15 for direct sales.
The petroleum levy on kerosene remains unchanged at Rs 20.36 per liter, while light duty diesel (LDO) continues to attract a levy of Rs 15.84 per litre. The fuel oil levy also remains unchanged at Rs77 per liter, equivalent to Rs82,077 per metric tonne.
The latest increase comes after the federal government last Friday reduced the prices of petrol and high-speed diesel by up to Rs 1.97 per liter for a week.
High-speed diesel is widely consumed by the transportation and agriculture sectors, and changes in its price have a significant impact on transportation costs and inflation.
Gasoline is mainly used by motorcycles and passenger vehicles. The demand for petrol has also increased following restrictions on the use of local gas in Punjab.
Kerosene remains an important fuel in remote areas, particularly in the northern parts of the country where liquefied petroleum gas (LPG) is not readily available for cooking. It is also a key fuel used by the Pakistan Army. Light diesel is mainly consumed by industry.
Meanwhile, Pakistan’s oil industry saw a significant drop in sales, as much as 20%, in June. Industry representatives attributed the decline largely to growing smuggling of petroleum products from Iran.
The general sales tax (GST) on petroleum products remains zero, resulting in loss of revenue for the provinces.
Sindh is now addressing the issue of the federal government’s reliance on the oil tax, arguing that unlike GST, which is shared with the provinces, the tax is entirely retained by the federal government.
