ISLAMABAD: The caretaker government on Friday night increased the prices of petrol and high-speed diesel (HSD) by Rs26.02 and Rs17.34 per litre, respectively, to over Rs330, a psychological barrier that has been crossed for the first time in the country’s history.

This is on top of Rs32.41 and Rs38.49 per litre increase in petrol and HSD prices in the last two fortnights since August 15. The combined increase now works out at Rs58.43 and Rs55.83 per litre within one month.

The increase in petroleum prices came on the heels of over 27.4pc increase in the rate of inflation in August that would also have a lag effect on general prices in the country over the coming days and weeks.

Both petrol and diesel have become costlier by 20pc since the caretaker government took over.

The announcement for increase in prices was made by the Ministry of Finance following clearance from caretaker Prime Minister Anwaarul Haq Kakar.

“Owing to the increasing trend of petroleum prices in the international market, the government has decided to revise the existing consumer prices of petroleum products,” the ministry said.

Under the decision, the ex-depot price of HSD has been fixed at Rs329.18 per litre instead of Rs311.84 at present, up by Rs17.34 or 5.6pc.

The retail price at pump would, however, be well above Rs330 per litre. Most of the transport sector runs on HSD. Its price is considered highly inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines, and particularly adds to the prices of vegetables and other eatables.

Likewise, the ex-depot price of petrol was fixed at Rs331.38 per litre instead of Rs305.36 for the next fortnight, showing an increase of Rs26.02 or 8.5pc. The product is mostly used in private transport, small vehicles, rickshaws and two-wheelers.

The government did not announce any change in the prices of kerosene and light diesel oil but it has passed on the around 88 paise per litre impact of an increase in sale margins for petroleum dealers and marketing companies already approved by the Economic Coordination Committee of the cabinet last week.

At present, the GST is zero on all petroleum products, but the government is charging Rs60 per litre petroleum development levy (PDL) on petrol and Rs50 each on HSD and high octane blending component and 95RON petrol. The government is also charging about Rs18-22 per litre customs duty on petrol and HSD.

Published in Dawn, September 16th, 2023