After a series of petrol price reductions, Pakistani consumers should now prepare for a potential sharp rise in fuel prices, starting on October 16, 2024. Early reports suggest that high-speed diesel (HSD) could see an increase of up to Rs. 10.25 per liter.
The Anticipation
Pakistan State Oil (PSO) is in the process of drafting a working paper to present to the Oil and Gas Regulatory Authority (OGRA) on October 15. This document will propose price revisions across various fuel types. Preliminary calculations indicate that petrol prices may rise by Rs. 3.95 per liter, kerosene oil by Rs. 7.85 per liter, and light diesel oil (LDO) by Rs. 8.33 per liter.
Once OGRA reviews the proposed adjustments, the working paper will be sent to the government for final approval. The new fuel prices will be officially announced by the Finance Ministry, following the prime minister’s approval.
A major factor behind this anticipated hike is OGRA’s proposed Rs. 2.75 per liter increase to enhance the profit margins of oil companies and petrol stations. If accepted, the profits per liter for oil companies would rise to Rs. 9.22, while petrol dealers’ margins would reach Rs. 10.04.
Estimated New Fuel Prices
If these increases go into effect, petrol could climb from Rs. 247.03 to Rs. 250.98 per liter, HSD from Rs. 246.29 to Rs. 256.54, kerosene oil from Rs. 154.90 to Rs. 162.75, and LDO from Rs. 140.90 to Rs. 149.23 per liter. These estimates are based on current government taxes and exclude exchange rate fluctuations.
Impact on Cost of Living
The potential fuel price surge is likely to raise the cost of living for many Pakistanis, with transportation costs and the prices of goods and services expected to follow suit.
It’s important to remember that these figures are preliminary, and final prices may differ. The government will carefully assess the economic consequences of any increase before reaching a decision.
