Fuel price goes up with start of new fiscal year

ISLAMABAD: The PML-N-led coalition government began the new fiscal year (2024-25) with an increase in petrol and high-speed diesel prices by Rs7.45 and Rs9.56 per litre, respectively, for the next fortnight.

In a late-night announcement, the Ministry of Finance said prices of petroleum products have seen an increasing trend in the international market during the last fortnight. The Oil and Gas Regulatory Authority (Ogra) has worked out consumer prices based on the price variations in the global market. The tax and duty rates on petroleum products will remain unchanged.

The new ex-depot petrol price for the July 1 to 15 period will be Rs265.61 per litre compared to Rs258.16 in the previous fortnight, up by 2.9pc (Rs7.45 per litre).

However, petrol would be available for over Rs266 per litre in the retail market. Petrol is mostly used in private transport, small vehicles, rickshaws, and two-wheelers and directly impacts the budget of middle and lower-middle classes.

Petrol hiked by Rs7.45 per litre, diesel price raised by Rs9.56

On the other hand, the new ex-depot price of high-speed diesel (HSD) is Rs277.45 per litre, or 3.6pc (Rs9.56) higher than Rs267.89 over the past fortnight.

Most of the transport sector runs on HSD. Its price is considered inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube wells and threshers and particularly adds to the prices of vegetables and other eatables. No wonder the government has estimated a 13.5pc inflation rate in June against 11.8pc in May.

Hours before the price hike announcement, the finance minister announced on Sunday evening that the petroleum levy would not be increased, although its ceiling had been increased to Rs70 per litre in the budget from Rs60 to create “headroom” for the future.

The government has jacked up the target for petroleum collection to Rs1.28 trillion in the next fiscal year beginning July 1 against Rs960bn estimated collection during the current year, almost Rs91bn higher than the Rs869bn budget target.

Officials said the prices of petrol and HSD had increased in the international market by about $4.4 and $5.5 per barrel, respectively, in the last fortnight. On the other hand, the rupee depreciated by about 17 paise against the dollar.

Since May 1, the prices of both petrol and HSD have been going down mainly because of a slump in the international market. Petrol prices dropped by nearly Rs35 to about Rs259 per litre on April 30. Likewise, HSD price came down by about Rs22 to Rs268 per litre in the second fortnight of April.

Published in Dawn, July 1st, 2024