Petrol Prices in Pakistan Expected to Rise From 1st March 2025

As March 1 approaches, Pakistani consumers brace for a potential increase in petrol prices, which could add to financial challenges for households and businesses. According to industry sources, petrol prices may rise by Rs. 4 to Rs. 4.50 per litre, while high-speed diesel (HSD) might see a slight reduction. The final decision will depend on global oil prices and exchange rate fluctuations, with official announcements expected on February 28.

Impact on Consumers and the Economy

Petrol serves as the primary fuel for motorcycles, cars, and small transport vehicles, making any price hike a significant concern, particularly for middle-class and lower-income families. A rise in petrol costs translates to higher commuting expenses, directly affecting daily budgets.

Diesel, on the other hand, plays a crucial role in heavy transport, agriculture, and railway operations. Any fluctuation in diesel prices can impact transportation costs for goods and food supplies, potentially leading to inflationary pressure on essential commodities.

Taxation and Fuel Pricing Structure

Despite the general sales tax (GST) on petrol and diesel being at zero, the government collects approximately Rs. 76 per litre in taxes, which includes the petroleum development levy (PDL) and customs duties. Additionally, oil companies and dealers apply their margins, further influencing the final retail price. Luxury fuels like high-octane petrol and light diesel also carry a Rs. 50 per litre levy, making them considerably more expensive.

Fuel Consumption and Government Revenue

Petrol and diesel remain among the top revenue sources for the government, with monthly sales ranging between 700,000 and 800,000 tonnes. Kerosene, which is primarily used in rural areas, has a lower demand of around 10,000 tonnes per month but is often sold at inflated market prices.

Consumer Expectations

With the final pricing decision imminent, Pakistani consumers are hopeful for minimal increases to ease financial pressure on households and businesses. Any surge in fuel prices could have a cascading effect on transportation and overall inflation, making affordability a growing concern for many citizens.

As the government prepares to announce the new fuel rates, consumers are keeping a close watch, hoping for stability in prices to maintain economic balance.

Afsheen Gohar

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