ISLAMABAD: The government may have to increase the tax on petrol again if it were to minimise the estimated Rs10 per litre hike in diesel prices later this week to keep inflation in check.

Informed sources said benchmark crude prices had slightly risen this week amid regional tensions, but high-speed diesel (HSD) prices remained on the higher side for the rest of the fortnight.

Therefore, the price of HSD, kerosene and light diesel oil were inching up and set to significantly impact the pricing pattern on Jan 31 for the following fortnight.

Based on existing tax rates, the informed sources said the ex-depot prices of HSD, LDO and kerosene have been estimated to go up by about Rs9.50 and Rs7 per litre, or around 3.7pc and 5pc, respectively, depending on final calculations. The petrol price, on the other hand, is estimated to decline by 40 paise per litre.

The kerosene and LDO rates currently stand at Rs170.88 and Rs146.18 per litre. These could touch Rs175 and Rs153 per litre with a Rs3.70 and Rs7 per litre increase. The ex-depot petrol price stands at Rs253.17 per litre but is being sold at Rs254.40 per litre at retail stations.

An official said the government would be advised to transfer at least half of its estimated price hike to petrol to keep inflation in check given diesel greater inflationary impact.

Of late, the government has been following this pattern of increasing petroleum levy (PL) on petrol to divert some pressure off diesel. In the last fortnightly price revision on Jan 15, it had increased petroleum levy by Rs4.65 to Rs87 per litre on petrol compared to Rs79 on HSD.

Together with customs duty, PL and climate support levy, the government is currently charging about Rs105 per litre taxes on petrol compared to Rs96 per litre, showing a Rs9 per litre gap. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers and has a direct bearing on the budget of middle- and lower-middle class.

The ex-depot price of HSD stands at Rs257.08 per litre. The retailers are selling the product on the higher side of Rs258 per litre. Most of the transport sector runs on HSD.

Its price is considered inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube-wells and threshers and particularly adds to the prices of vegetables and other eatables.

Published in Dawn, January 30th, 2026