Petrol and Diesel prices increased amid international oil market trends
The federal government announced a hike in fuel prices on Saturday, raising the cost of petrol by Rs3.72 per litre and high-speed diesel (HSD) by Rs3.29 per litre for the next fortnight, effective from December 1, 2024. The new price of petrol is set at Rs252.10 per litre, up from Rs248.38, while HSD now costs Rs258.43 per litre, compared to its previous rate of Rs255.14.
In contrast, the prices of kerosene oil and light diesel oil were reduced by Rs0.62 and Rs0.48 per litre, respectively. Kerosene oil now costs Rs164.98 per litre, while light diesel oil is priced at Rs151.73 per litre.
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Petrol is widely used for private transportation, small vehicles, rickshaws, and motorcycles, directly affecting middle and lower-income groups who rely on it for commuting. High-speed diesel, on the other hand, is essential for heavy goods transport vehicles, buses, trains, and agricultural machinery. The increase in HSD prices is expected to influence the cost of goods, particularly food items, due to higher transportation costs.
The Oil and Gas Regulatory Authority (OGRA) calculated the revised prices based on fluctuations in international oil markets. Over the past week, global oil prices declined due to easing supply concerns from the Israel-Hezbollah conflict and the prospect of increased oil supply in 2025. Brent crude settled at $72.94 per barrel, while West Texas Intermediate closed at $68 per barrel.
The government’s pricing formula also includes taxes and levies, with around Rs78 per litre in petroleum levies on petrol and diesel, alongside Rs8 per litre in customs duties. Additionally, oil companies and dealers receive about Rs17 per litre in distribution and sales margins.
The increase in fuel prices aligns with the government’s efforts to meet its revenue collection targets for the fiscal year. The budget raised the petroleum levy ceiling from Rs60 to Rs70 per litre, aiming to collect Rs1.28 trillion, which is Rs150 billion higher than the previous year’s collection.
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