The petrol prices in Pakistan have reached a historic high of Rs 127.30 per litre on Thursday as the government announced a Rs 4 hike citing rising prices in the global market.
In a notification, the government’s Finance Division said that the new prices will be effective from October 1 “due to an increase in petroleum prices in the international market”.
The notification said, “OGRA has worked out the higher petroleum prices but prime minister has decided against the recommendation and passed on the minimum increase in prices to the consumers.”
It said that the government has absorbed the higher international pressure of prices through a reduction in petroleum levy and the sales tax.
“It is pertinent to mention that petroleum prices in Pakistan are the cheapest in the region,” the notification added.
An across-the-board hike also included an increase in the price of high-speed diesel by Rs2 per litre, raising it to Rs122.04 per litre. High-speed diesel is the primary fuel that is used in the transport and agriculture sectors and is expected to have a direct impact on inflation.
The kerosene oil also saw a jump in price as it rose to Rs 99.31 per litre from Rs 92.26 to registering an increase of Rs7.05 per litre. Kerosene oil is used for cooking purposes in remote areas like northern parts of the country as the Liquefied Petroleum Gas (LPG) is not generally available in those areas.
The government has also increased the price of light diesel oil (LDO) by Rs8.82 per litre, raising it to Rs 99.51 per litre from the earlier price of Rs 90.69 per litre.
The Oil and Gas Regulatory Authority (OGRA) calculates ex-depot prices of petroleum products in view of the rate of petroleum levy and general sales tax. Petroleum products are a significant contributor to taxes as the government is currently charging a double tax. It is charging a petroleum levy and general sales tax, resulting in higher prices.