Diesel Price Raised Despite Lower Cost as Petroleum Levy Increased by Rs2 Per Litre
- Federal government increases petroleum levy on high-speed diesel by Rs2 per litre.
- Diesel levy rises to Rs76.28 per litre despite a decline in its international Platts price.
- High-speed diesel price increased by Rs1.39 per litre for August 12.
- Petrol continues to carry an Rs80 per litre petroleum levy, while a separate Rs5 climate support levy applies to both fuels.
The federal government has increased the petroleum levy on high-speed diesel by another Rs2 per litre, raising the tax burden on the fuel despite a decline in its underlying cost, according to documents from the Oil and Gas Regulatory Authority (OGRA).
The documents show that the petroleum levy on high-speed diesel has been increased by Rs2 to Rs76.28 per litre. The adjustment comes even as the international Platts price used in diesel pricing declined from $146.24 per barrel to $145.81 per barrel.
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Despite the reduction in the international cost, consumers did not receive the benefit because of the higher petroleum levy. Instead, the price of high-speed diesel was increased by Rs1.39 per litre for August 12.
The figures indicate that while the international benchmark cost of diesel moved slightly lower, the additional levy more than offset the potential relief for consumers, resulting in a net increase in the domestic price.
Meanwhile, the petroleum levy on petrol has been maintained at Rs80 per litre, with no further increase reported in the latest adjustment.
In addition to the petroleum levy, the government is separately charging a climate support levy of Rs5 per litre on both petrol and high-speed diesel. This means consumers continue to face multiple government levies as part of the final retail price of petroleum products.
The latest adjustment highlights how changes in taxes and levies can influence domestic fuel prices even when international costs decline, with the higher diesel levy preventing the reduction in global cost from being passed on to consumers.
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