Pakistan’s economy, petrol and high-speed diesel (HSD) prices are expected to increase from July 1, 2024. The estimated rise is Rs 7.54 per litre for petrol and Rs 9.84 per litre for HSD for the next two weeks. This potential hike is based on the current government taxes and profit margins for oil marketing companies (OMCs), reflecting a broader trend of increasing fuel costs globally.
The Pakistani government currently imposes a petroleum levy (PL) of Rs 60 per litre on both petrol and HSD. Interestingly, there is no additional General Sales Tax (GST) applied to these fuels. However, if the government opts to increase the PL by Rs 5 per litre for both fuels, the price surge could be more pronounced. This would mean petrol could rise by Rs 12.54 per litre, and HSD could see an increase of Rs 14.84 per litre.
The recently proposed Finance Bill 2024 allows the government to raise the PL to a maximum of Rs 80 per litre. This legislative change could potentially generate additional revenue for the government, albeit at the cost of higher consumer prices.
The backdrop to this expected price hike is a surge in international oil prices. Over the past two weeks, the prices of petrol and HSD have increased by approximately $4.4 and $5.5 per barrel, respectively. This upward trend in the global oil market is a crucial factor influencing domestic
