By Staff Reporter
ISLAMABAD: The government opted to hold fuel prices steady for the next two weeks, even as it hiked a key levy on gasoline and diesel, effectively pocketing gains from falling global oil prices rather than passing relief to consumers.
The Petroleum Division announced late Thursday that petrol would remain at Rs253.17 a liter and high-speed diesel at Rs257.08 a liter through Jan. 31. At the same time, it raised the petroleum levy on petrol by Rs4.62 a liter and on diesel by Re0.80, according to an official notification. The move pushes the total levy on petrol and high-octane blending component to Rs84.27 a liter from Rs79.62. For diesel, it’s now Rs76.21, up from Rs75.41. The government also continues to impose a Rs2.50 climate support levy on petrol, diesel and high-octane fuel.
Consumers face additional charges, including an inland freight equalization margin of Rs8.97 a liter on petrol and Rs7.25 on diesel. Kerosene carries a Rs20.36 levy per liter, while light diesel oil is at Rs15.84.
The decision comes amid a broader drop in international crude prices, which had fueled expectations for a reduction of as much as Rs4.50 a liter across petroleum products. Instead, Islamabad chose to bolster its revenue amid fiscal pressures, analysts said, leaving households and businesses to grapple with elevated costs.
Petrol, widely used in cars, motorcycles and rickshaws, hits middle- and lower-income families hardest, squeezing household budgets already strained by inflation. Diesel, powering trucks, buses, trains and farm machinery like tractors and irrigation pumps, tends to ripple through the economy, driving up prices for food and other essentials.
By maintaining pump prices, the government safeguards its income from fuel taxes, a critical source of funds in a country facing chronic budget shortfalls and reliance on International Monetary Fund support. Yet the strategy risks stoking public discontent as global benchmarks like Brent crude hover around multi-month lows, down more than 10% in the past year amid ample supplies and subdued demand.
Industry observers noted that the levy increase offsets the potential benefits from cheaper imports, ensuring fiscal targets are met without alienating voters through outright price hikes. Still, transporters and farmers, key diesel users, may pass on the burden, potentially fueling inflationary pressures in an economy where consumer prices rose about 5% last month.
Pakistan’s energy sector remains a flashpoint, with frequent adjustments tied to fortnightly reviews of global rates, exchange fluctuations and domestic taxes.
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