The caretaker government on Wednesday hiked the price of petrol by Rs13.55 per litre for the next fortnight.

The new price of petrol is now Rs272.89 per litre from the previous price of Rs259.34, according to a notification from the Finance Division.

The price of high-speed diesel (HSD) was increased by Rs2.75 to Rs278.96 per litre.

The notification did not mention any changes in the prices of light-diesel oil (LDO) and kerosene oil.

The petrol price increase is higher than what was expected earlier. The prices of petrol and HSD were estimated to go up by Rs5-9 per litre for the next fortnight owing to higher international prices and import premiums, nullifying an impact of minor exchange rate gains.

Informed sources had said the prices of both major petroleum products had increased in the international market over the past fortnight and Pakistan State Oil (PSO) also had to pay higher import premiums even though the rupee had gained against the US dollar.

As a result, the price of HSD was expected to go up by Rs4-6 per litre and that of petrol by Rs6.5 to 9 per litre, depending on the final exchange rate calculation. However, the prices of kerosene and LDO were expected to remain unchanged.

Officials had said the price of petrol had come down by more than $3 per barrel to $86.5 from $83 per barrel over the last two weeks while HSD had become costlier by about $2 per barrel to $97.5 from about $95.6. The rupee on the other hand gained by about Rs1.5 against the dollar to about Rs280 from Rs281 in the first half of January. The premium paid by PSO for securing product cargoes went up on both products by $2 per barrel each. It increased to $6.5 per barrel from $4.2 for HSD and from $7.5 per barrel to $9.5.

The government has already achieved a Rs60 per litre petroleum levy — the maximum permissible limit under the law — on both petrol and HSD. The government had set a budget target to collect Rs869bn as petroleum levy on petroleum products during the current fiscal year under the commitments made with the International Monetary Fund but is hoping the collection to go beyond Rs920bn by the end of June.

Petroleum and electricity prices have been the key drivers of the high rate of CPI-based inflation recorded at 29.7 per cent in December 2023.