ISLAMABAD:
The government on Friday raised prices of both petrol and high speed diesel (HSD) by Rs15 amid fluctuation in global oil prices due to closure of the Strait of Hormuz effective from May 9 (today).
According to a press release issued by the Ministry of Energy (Petroleum Division), the price of HSD increased by Rs15 per litre, moving from the existing Rs399.58 to the new rate of Rs414.58 per liter.
It also increased the price of petrol by Rs14.92, bringing the new price to Rs414.78 per liter against the previous rate of Rs399.86.
This is the second hike in fuel prices in May.
The government had increased the price of HSD by up to Rs19.39 per litre last week. It had also imposed a petroleum levy of Rs28 per litre on HSD which stood at zero earlier.
Pakistan State Oil (PSO) had imported diesel at a high premium of $34 per barrel, resulting in a diesel price increase of Rs120 per litre.
The government was now recovering that amount through levy and freight charges. There was also pressure from the International Monetary Fund (IMF) to increase the petroleum levy rate.
Even the petroleum minister had earlier told the media that the government could increase the petroleum levy by up to Rs55 per litre due to pressure from the IMF.
Last week, the government had also increased the price of petrol by Rs6.51 per litre.
HSD is widely used in the transport and agriculture sectors. The sowing season for crops is underway; therefore, the increase in its prices will negatively impact the agriculture sector where input costs are already high.
The price of fertilizer has already increased due to a rise in transportation cost.
Petrol is used in motorcycles and cars. However, the prime minister had earlier announced a continuation of a Rs100 per litre subsidy for motorists.
CNG is an alternative to petrol but Punjab lacks indigenous gas for CNG outlets and therefore the demand for petrol is even greater in the country’s most populous province.
During the ongoing Gulf war, Iran and the United States have maintained a blockade of the Strait of Hormuz which supplies 20% of global oil.
The entire world is facing a crisis like situation as oil prices have jumped up due to shortage of supplies. Middle East countries like Saudi Arabia, UAE and Kuwait also face issues of supplies as their oil facilities have been hit. Iran is also a key oil supplier to China.
