The newly-installed caretaker administration increased petrol and diesel prices by up to Rs. 20 per litre on Tuesday, the second significant increase in a fortnight. This is likely to rekindle inflation, which had slowed during the previous two months.
According to a notification from the finance division, the new price of petrol will be Rs. 290.45 per litre as of today (Wednesday) following an increase of Rs. 17.50 per litre.
High-Speed Diesel (HSD) will cost 20 rupees more per litre to jacks up at Rs. 293.40, making it even more expensive.
After receiving approval from interim Prime Minister Anwaarul Haq Kakar, who was sworn in on Monday, the Ministry of Finance revealed the amended pricing late at night.
— Ministry of Finance (@FinMinistryPak) August 15, 2023
According to the finance division, the price increases for the two major fuels were brought on by recent increases in petroleum prices on the global market.
Kerosene and light diesel oil prices were not, however, mentioned in the official notification.
Most Recent Increase in Petrol Prices
The most recent increase in gasoline prices followed a similar increase on August 1 by the departing administration. This indicates an approximately 40 rupee increase in fuel prices per litre in just 15 days.
In March of this year, the cost of high-speed diesel reached its previous high of Rs. 293 a litre. Because it is mostly utilized in large transportation vehicles, railroads, and agricultural engines like trucks, buses, tractors, tube wells, and threshers, its price is seen as being very inflationary and it has a significant impact on the price of vegetables and other foods.
Similar to this, the cost of petrol peaked at Rs. 282 a litre in mid-April before falling as low as Rs. 253 later on. The product directly impacts the budgets of middle- and lower-middle class residents and is primarily utilized in private transportation, small vehicles, rickshaws, and two-wheelers.
According to the most recent data, inflation assessed by the Consumer Price Index (CPI) basket of goods and services was 28.3 percent in July, a slight decrease from 29.4 percent in June and a record 38 percent in May, but still significantly higher, especially given the high base effect.
Percentage Comparison Between 2022 and 2023
According to Finance Ministry data, the price of petrol (Rs. 290.45 per litre) is now 24 percent more than a year ago (Rs. 233.91 in mid-August) and 35 percent higher than the previous year’s low (Rs. 214.8 in mid-December).
The main sales tax on all petroleum products is currently 0, however the government charges a petroleum development levy of Rs. 55 per litre on petrol and Rs. 50 per litre on HSD, HOBC, and 95 RON (research octane number) fuel.
The government also levies a customs fee of Rs. 18-22 per litre on petrol and high-speed diesel (HSD).
Petrol and high-speed diesel are key cash generators for the government, with monthly sales of 700,000 to 800,000 tons compared to kerosene’s monthly requirement of 10,000 tons.
To read our blog on “Govt. increase massively in petrol prices by Rs. 19.95/liter,” click here.
