As per reports, there is a possibility of petrol prices in Pakistan increasing by Rs. 12 to Rs. 22 per liter in the next bi-monthly August review.
According to The Express Tribune, Tahir Abbas, the Head of Research at Arif Habib Limited (AHL), mentioned that if international oil costs continue to rise, the government might even consider raising rates beyond the estimated range of Rs. 12-22 per liter.
Recently, the government raised petrol and gasoline prices by approximately Rs. 20 per liter, resulting in the current rates reaching Rs. 273.
This increase was implemented due to the conditions imposed by the International Monetary Fund (IMF), which compelled the government to pass on the impact of rising international commodity prices to local consumers.
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Looking ahead, Abbas recommended a potential diesel price hike of Rs. 20-22 per liter and an increase in petrol prices by Rs. 12-13 per liter for the second half of August.
These adjustments reflect the ongoing fluctuations in global oil prices, which directly influence the domestic fuel prices in Pakistan.
Global Fuel Prices
The surge in global fuel prices has been significant in the last 15 days, with benchmark Brent crude oil prices rising by 16% during July.
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Refined product prices have also climbed, with a $13 increase per barrel to $111 per barrel, and petrol prices rising by $7 per barrel to $97 per barrel.
These potential price hikes could impact August’s inflation reading. In response, the central bank may consider raising its policy rate in September if inflation exceeds expectations.
The government’s aim has been to minimize the impact of rising fuel costs, but the global market dynamics have presented challenges.
Urging the Government for Relief
Khalid Tawab, a prominent business leader representing the Federal of Pakistan Chambers of Commerce and Industry (FPCCI), has called on the government to review its decision to increase petroleum prices, citing concerns regarding the impact on the public and businesses.
Tawab suggested reducing the petroleum development levy (PDL) currently set at Rs. 50 per liter.
Lowering the PDL could offer much-needed relief to both the general public and businesses grappling with the escalating fuel costs.
