ISLAMABAD: Prices of petrol and high-speed diesel (HSD) are expected to increase by Rs5.25 and Rs6.50 per litre, respectively, for the upcoming fortnight starting July 16, owing to a rise in global oil prices and import premiums.

According to informed sources, the ex-depot price of petrol is projected to rise by about 2pc to Rs272.04 per litre, while HSD is likely to see a 2.5pc increase to approximately Rs279.48 per litre. The final prices will be announced after government approval.

Currently, petrol is priced at Rs266.79 per litre following a Rs8.36 per litre hike on June 30. Widely used in motorcycles, rickshaws, and private vehicles, petrol has a direct impact on the budgets of middle- and lower-income households.

Diesel, which fuels heavy transport, agricultural machinery, and trains, stands at Rs272.98 per litre after a Rs10.39 hike earlier this month. Its price is considered highly inflationary, influencing the cost of food and other essential goods. Transporters have already begun adjusting fares in anticipation of the expected increase.

Petrol and diesel rates may rise by Rs5.25 and Rs6.50 per litre

In contrast, the prices of kerosene and light diesel oil are projected to decline by Rs3.80 and Rs2.25 per litre, respectively.

Despite zero general sales tax (GST) on petroleum products, the government is currently collecting close to Rs98 per litre in total levies on both petrol and diesel. This includes a petroleum development levy (PDL) of Rs78.02 on petrol and Rs77.01 on diesel and HOBC, along with a Rs2.25 per litre climate support levy (CSL). Additionally, a customs duty of Rs20-21 per litre is levied on both fuels, whether imported or locally refined.

Oil marketing companies and dealers are earning around Rs17 per litre as combined distribution and retail margins.

Petrol and diesel remain the primary drivers of fuel consumption, with monthly sales between 700,000 and 800,000 tonnes, compared to just 10,000 tonnes of kerosene.

In FY24, the government collected Rs1.161tr through the petroleum levy and aims to increase this by 27pc to Rs1.470tr in FY25. Despite zero GST, petroleum products continue to serve as a significant source of revenue.

Oil falls 1pc

According to a Reuters report, oil prices edged lower on Monday, as investors weighed new threats from US President Donald Trump for sanctions on buyers of Russian oil that may affect global supplies, while still worried about Trump’s tariffs.

Brent crude futures fell 79 cents, or 1.12pc, to $69.57 a barrel by 1:04 pm EDT (1704 GMT). US West Texas Intermediate crude futures were down $1.07, also 1.56pc, to $67.38.

Trump announced new weapons for Ukraine and threatened to hit buyers of Russian exports with sanctions unless Russia agrees to a peace deal in 50 days.

Oil prices rallied early, on expectations that Washington would impose steeper sanctions. But prices retreated as traders weighed the 50-day deadline.

“The market took it as a negative because there seemed to be a lot of time to negotiate,” said Phil Flynn, senior analyst with Price Futures Group.

Published in Dawn, July 15th, 2025