In response to soaring international oil prices, the Finance Division announced a significant hike in petrol and diesel prices, effective immediately. According to the notification, the new price for petrol stands at Rs275.6 per liter, while diesel (HSD) will now cost Rs283.63 per liter.
The decision comes amidst a $4.4 per barrel increase in petrol and $2 per barrel increase in diesel prices in the global market over the past fortnight. Sources indicate that these price hikes have driven the domestic increase by over Rs7.60 per liter for petrol and Rs3.50 per liter for diesel.
Despite the rise in prices, the notification assured no change in the current levels of applicable duties and taxes. The government will maintain taxes at Rs77 per liter, along with a Rs60 per liter Petroleum Development Levy (PDL) on both products. Additionally, customs duty remains fixed at Rs17 per liter.
Moreover, the Finance Bill has raised the maximum limit of the PDL to Rs70 per liter, aiming to collect Rs1.28 trillion in the fiscal year, a significant increase from the previous year’s Rs960 billion collection.
In the backdrop of unchanged import premiums and a slight rupee depreciation against the dollar, the government’s move aims to stabilize revenue amid volatile global energy markets.
The increase in diesel prices, crucial for heavy transport and agriculture, is expected to have inflationary impacts, particularly affecting the prices of vegetables and essential commodities.
Petroleum and electricity prices continue to be critical drivers of inflation, impacting private transport and contributing to overall cost pressures in the economy.
