Significant Petrol and Diesel Price Increase Expected

Jawad

14 Jul 2024

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Significant Petrol and Diesel Price Increase Expected

The government is considering a significant rise in petroleum product prices for the latter half of July 2024. Substantial increases in petrol and diesel prices are anticipated. This potential hike has garnered attention and concern from various sectors, including consumers and industry experts.

Predicted Price Increases

Experts suggest that petrol prices may increase by Rs. 7.67 per liter, and high-speed diesel (HSD) could see a rise of Rs. 3.72 per liter. Additionally, kerosene oil and light diesel oil (LDO) are expected to go up by Rs. 2.39 and Rs. 0.92 per liter, respectively. These predicted increases have sparked discussions about the potential impact on the economy and daily life.

New Price Estimates

If these adjustments are implemented, petrol could cost Rs. 273.28 per liter, HSD at Rs. 281.25 per liter, kerosene oil at Rs. 184.25 per liter, and LDO at Rs. 166.65 per liter in the latter part of July 2024. These estimates are influenced by global oil prices, currency exchange rates, and financial dynamics within the energy sector.

Factors Influencing Prices

The tax framework and predicted changes in the dollar exchange rate play significant roles in these price calculations. The Inland Freight Equalisation Margin (IFEM) for petrol is expected to increase from Rs. 6.12 to Rs. 7.79, while for HSD, it is likely to rise from Rs. 3.11 to Rs. 4.51. These factors collectively contribute to the anticipated price adjustments.

Potential Additional Levies

Additionally, sources indicate that if an extra petroleum levy of Rs. 5 per liter is imposed, petrol prices could climb to Rs. 278.28 per liter, reflecting a rise of Rs. 12.67, and HSD could reach Rs. 286.17 per liter, marking an increase of Rs. 8.72. These potential levies could further impact the overall cost of petroleum products for consumers.

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