Govt raises petroleum prices to record level

Published October 17, 2021
ISLAMABAD: A worker is changing the digits on the price board of a fuel station as the prices hit a new peak.—Online
ISLAMABAD: A worker is changing the digits on the price board of a fuel station as the prices hit a new peak.—Online

• Petrol price jumps to nearly Rs138 per litre
• High-speed diesel rate soars by Rs12.44 a litre
• Inflationary impact on national economy feared

ISLAMABAD: Petroleum fuel prices reached a record level on Saturday when the federal government raised petrol price by more than Rs10 and rate of diesel by over Rs12 per litre.

According to a finance ministry notification, the new price of petrol has been fixed at Rs137.79 with an increase of Rs10.49 per litre for the next fortnight.

Similarly, the new price of high-speed diesel (HSD) — the country’s most widely consumed petroleum fuel — has reached Rs134.48 after an increase of Rs12.44 per litre. However, due to the deregulations, the consumers will have to pay over Rs138 per litre for petrol and more than Rs135 per litre for diesel.

The increase has been made due to the rising energy prices globally that have led to the surge in the prices of other fuels including coal, Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG).

The record high fuel prices will have an inflationary impact not only on the nati­o­nal economy, particularly when the country is a net importer of energy, but also on the budgets of aviation industry, the Army Aviation and the Pakistan Air Force.

The government also jacked up prices of jet fuels JP-1 and JP-4 by around Rs10 to cross the Rs110 per litre mark.

However, the finance ministry stated: “The government has absorbed the pressure and provided maximum relief to the consumers by keeping petroleum levy and the sales tax to minimum.”

According to government officials, currently the Brent crude price has reached $85 per barrel, which is the highest ever since October 2018, with the result that the entire energy chain prices witnessed a strong surge in the past couple of months due to supply bottlenecks amid growing demand for energy inputs.

Experts linked the soaring energy prices to the post-Covid economic reco­very, as demand across the world is rising though the supply side is still facing constraints to operate at full capacity.

The price of kerosene oil has been raised by Rs10.95 to Rs110.26 per litre, which will have a serious financial impact on the rural population of the mostly hilly north, where LPG is not available. Kerosene oil is primarily used for cooking in winters. It is also widely used by the armed forces personnel posted in the remote northern part of the country.

The price of Light Diesel Oil (LDO) has been raised by Rs8.84 to Rs108.35 per litre; it is consumed to run certain categories of engines in industrial and agricultural sectors. It is for the first time that all the petroleum fuels in Pakistan have crossed the Rs100 mark.

The impact of rising fuel prices was also witnessed recently when none of the bidders participated in the tender floated by the Pakistan LNG Limited (PLL) and Pakistan State Oil (PSO) for the supply of LNG cargoes, due to high prices in the international markets.

In Pakistan, the demand for petrol is expected to rise further with anticipated gas shortages in coming months when the government could curtail operations of Compressed Natural Gas (CNG) stations to mitigate its impact on domestic consumers.

Published in Dawn, October 17th, 2021

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