Up to Rs8.50 hike in fuel prices likely

ISLAMABAD: While the impact of the Middle East escalation is yet to materialise, the higher international market is estimated to push up the prices of petrol and high-speed diesel by about Rs2.50 and Rs8.50 per litre, respectively on Monday (April 15) for the next fortnight, despite a decline in the import premium and a slightly improved exchange rate.

Informed sources said the prices of petrol and HSD had increased in the international market by about $4 and $4.50 per barrel, respectively, during the last fortnight, before the latest escalation. Depending on final calculation, the price of petrol is projected to be higher by Rs2.50 to Rs2.80 and that of HSD to go up by Rs8 to Rs8.50 per litre.

Interestingly, the imp­ort premium on petrol has dropped by almost 21pc to $10.7 per barrel over the last fortnight when compared to $13.50 in last few days of March and the rupee strengthened by about 40 paisa against a dollar to Rs278.20. The net impact is estimated to be about Rs2.80 per litre increase in petrol price from existing rate of Rs289.41.

The HSD price, on the other hand, was up in the international market and its import premium paid by the benchmark Pakistan State Oil remained unchanged at $6.50 per barrel.

HSD rate was thus estimated to be higher by Rs8 to Rs8.50 per litre, subject to final exchange rate adjustment in pricing, from current rate of Rs282.24 per litre at depot stage.

For the purpose of price calculations, officials said the petrol price had gone up by about $4 per barrel to $98.5 last week while HSD price went up by $4.50 per barrel to $102.9.

Almost a fortnight ago, the government had increased the price of petrol by Rs9.66 per litre and reduced that of high speed diesel (HSD) by Rs3.32 per litre for the fortnight ending April 15.

The government has already achieved Rs60 per litre petroleum levy — maximum permissible limit under the law — on both petrol and HSD.

Under the commitments made with the International Monetary Fund, the government had set budget target to collect Rs869bn as petroleum levy on petroleum products during the current fiscal year. It has already collected about Rs475bn in the first half (July-December) of the fiscal, though the government is expected to mop up about Rs970bn by end of the year despite the revised target of Rs920bn by end-June.

At present, the government is charging about Rs82 per litre tax on both petrol and HSD.