Fuel Prices Surge: Government Announces New Petrol and Diesel Rates
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The federal government has announced a significant increase in fuel prices,with petrol seeing a hike of Rs5.36 per litre and high-speed diesel (HSD) rising by Rs11.37 for the next fortnight. The new price for petrol is now Rs272.15 per litre,and HSD is priced at Rs284.35 per litre.
These adjustments,based on recommendations from the Oil and Gas Regulatory Authority (Ogra) and relevant ministries,come as global trends influence domestic pricing. while kerosene and light diesel oil prices remain unchanged,the impact of these increases on everyday life is substantial.
Petrol,a staple for motorcycles,rickshaws,and private vehicles,directly affects the financial stability of middle- and lower-income households.Diesel, crucial for heavy transport, agricultural machinery, and trains, carries a highly inflationary effect, potentially increasing the cost of food and other essential goods.Transporters have already begun adjusting fares in anticipation of these changes.
Despite a zero general sales tax (GST) on petroleum products, the government continues to collect substantial levies. This includes a petroleum advancement levy (PDL) of Rs78.02 on petrol and Rs77.01 on diesel and HOBC, alongside a Rs2.25 per litre climate support levy (CSL). Furthermore, a customs duty of Rs20-21 per litre is applied to both fuels, regardless of weather they are imported or locally refined.
Oil marketing companies and dealers are currently earning approximately Rs17 per litre as combined distribution and retail margins. Petrol and diesel remain the dominant fuel sources, with monthly sales ranging between 700,000 and 800,000 tonnes, significantly higher than the 10,000 tonnes of kerosene sold monthly.
In the fiscal year 2024, the government collected Rs1.161 trillion through the petroleum levy and aims to boost this figure by 27% to Rs1.470 trillion in FY25. even with zero GST, petroleum products continue to be a major source of government revenue.
Understanding Fuel Price Adjustments
Fuel prices are subject to regular adjustments based on international market rates, currency exchange fluctuations, and government taxation policies. These factors collectively determine the final price consumers pay at the pump. The government utilizes levies like the Petroleum Development Levy (PDL) and Climate Support Levy (CSL) to generate revenue and manage the petroleum sector.
Frequently asked Questions About Fuel Prices
- Why have petrol prices increased?
- Petrol prices have increased due to recommendations from Ogra and concerned ministries,reflecting global trends and government levies.
- What is the new price of petrol per litre?
- The new price of petrol is Rs272.15 per litre.
- How much has the price of high-speed diesel (HSD) increased?
- The price of high-speed diesel (HSD) has increased by Rs11.37 per litre.
- Are there any changes to kerosene prices?
- No, the press release did not mention any changes in the prices of kerosene.
- What levies are collected on petrol and diesel despite zero GST?
- Despite zero GST, levies include Petroleum Development Levy (PDL), Climate Support Levy (CSL), and customs duty.
- What is the impact of diesel price hikes on the economy?
- Diesel price hikes are considered highly inflationary, potentially increasing the cost of food and other essential goods due to its use in heavy transport and agriculture.
Disclaimer: This article provides information on fuel price changes and does not constitute financial or economic advice. Readers are encouraged to consult with financial professionals for personalized guidance.
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