Islamabad:
On Monday evening, the federal government made a massive increase in petroleum products prices for the next fortnight, considered an impact on the 12-day Iran-Israel war which almost threatened to engulf the entire region of the Middle East.
According to a notification issued by the finance division, the price of gasoline has been increased by RS8.36 per liter and that of high -speed diesel (HSD) of RS10.39 per liter for the period from July 1 to 15.
“The government has decided to revise the prices of petroleum products for the fortnight from today, based on the recommendations of OGRA and the ministries concerned,” said the notification of the finance division.
The notification has indicated that petrol will now be available at RS266.79 per liter – RS8.36 per liter increased by RS258.43 per liter. Similarly, the HSD rate is high up to Rs272,98 per liter of RS262.59 per liter, recording an increase of RS10.39 per liter.
Pakistan is a net oil importer and imports around 85% of its total petroleum products needs, mainly from the Middle East. Local oil and gas companies produce crude oil to meet 15% of total oil needs.
Last month, Israeli air strikes on Iranian nuclear and military sites led to a sharp increase in crude oil prices that jumped from 7 to 11% to around $ 87 to $ 87 a barrel, which was the highest level in six months, according to reports.
This increase came after the threat of Iran to close the Hormuz Strait in the Persian Gulf. However, the ceasefire between Iran and Israel led to bringing the price of crude oil to $ 67 per barrel during the period of June 23 and 26, coming back to the pre-war level by June 26.
In Pakistan, the HSD is widely used in the agriculture and transport sectors. Consequently, the new increase in its price will have an inflationary impact on consumers. Due to its use in the transport sector, the cost of transporting goods will increase, resulting in higher inflation across the country.
Essence, on the other hand, is used in motorcycles and cars and is considered an alternative to compressed natural gas (GNC). Public gas services had ceased to provide native gas to GNC stations, in particular Punjab; Consequently, GNC’s catch has used gas imported for more than a decade.
The recent increase in petrol prices would also minimize the difference in the price of the GNC and gasoline. Prices come into force on the first day of the new financial year 2025-26.
The government has a space to absorb the increase in petroleum products by adjusting the oil tax. Consumers are currently paying more than RS77 by line of liter oil on diesel and petrol. However, the government had adopted the way of increasing the prices of petroleum products rather than saving consumers from this increase.
Consumers had to deal with more increase in oil prices because the government had set a income target of 1.4 Billion of rupees due to the highest oil tax in the history of the country. Was the revised petroleum levy objective was RS1,161? Billions for the financial year 2024-2025.
In addition, the government also imposed a carbon tax on petroleum products that would result in an additional increase in petroleum products prices.
