Pakistan is likely to experience another petroleum price hike beginning on November 16, 2024, as local fuel costs continue to reflect global market fluctuations. The Oil and Gas Regulatory Authority (OGRA) is expected to review proposals for price adjustments submitted by oil companies, with a final decision to be made in consultation with the Prime Minister.
Expected Fuel Price Increases
According to early projections, the price of petrol may rise by Rs 2.50 per liter, while high-speed diesel (HSD) could see a substantial increase of Rs 5.91 per liter. Kerosene oil is expected to rise by Rs 5.54 per liter, and light diesel oil (LDO) may go up by Rs 5.90 per liter. These potential adjustments come on the heels of the last price increase on October 31, adding further pressure on consumers already coping with elevated fuel costs.
Global Market Influence
While crude oil prices have dropped by approximately 25% over the past month, slight fluctuations in global oil prices are contributing to the proposed hike in Pakistan. Brent crude recently fell to $71.82 per barrel, and the US West Texas Intermediate (WTI) saw a small increase to $68.07 per barrel. In addition, the international price of petrol rose from an average of $75.6 to $77.2 per barrel, and high-speed diesel climbed from $83.6 to $88 per barrel. These shifts have a direct impact on the cost of imported fuel, influencing local retail prices.
The Role of Fixed Taxes in Fuel Costs
Fuel prices in Pakistan are further elevated by fixed taxes on petroleum products. Currently, the government imposes Rs 76 per liter in taxes on both petrol and HSD, which includes a petroleum development levy of Rs 60 and customs duty of Rs 16. This taxation adds a significant burden on consumers, contributing to the rising cost of fuel at the pump.
Impact on Household Budgets
For Pakistani households already managing high living expenses, the anticipated fuel price hike could add further strain to daily expenses. The rise in petrol, diesel, and other fuel prices is likely to impact the cost of goods and services, making it challenging for families to balance their budgets.
As fuel prices continue to be volatile, government actions and OGRA’s final decision on November 16 will be closely watched by the public, eager for relief amidst rising inflation.
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