ISLAMABAD:
The government on Friday hiked the prices of both petrol and high-speed diesel (HSD) by Rs15 amid fluctuations in global oil prices due to the closure of the Strait of Hormuz with effect from May 9 (today).
According to a press release issued by the Ministry of Energy (Petroleum Division), the price of HSD increased by Rs 15 per litre, moving from the existing Rs 399.58 to the new rate of Rs 414.58 per litre.
It also increased the price of petrol by Rs14.92, bringing the new price to Rs414.78 per liter against the earlier rate of Rs399.86.
This is the second increase in fuel prices in May.
The government had hiked the price of HSD by up to Rs 19.39 per liter last week. It had also imposed oil duty of Rs 28 per liter on HSD which was nil earlier.
Pakistan State Oil (PSO) had imported diesel at a high premium of $34 per barrel, resulting in a diesel price hike of Rs120 per litre.
The government now recovered this amount through tax and freight. There was also pressure from the International Monetary Fund (IMF) to increase the oil tax rate.
Even the petroleum minister had earlier told the media that the government could increase the oil tax by up to Rs.55. per liter due to pressure from the IMF.
Last week, the government had also hiked the price of petrol by Rs 6.51. per litre.
HSD is widely used in the transport and agricultural sectors. The sowing season for crops is underway; therefore, the increase in its prices will have a negative impact on the agricultural sector where input costs are already high.
The price of fertilizer has already increased due to an increase in transport costs.
Gasoline is used in motorcycles and cars. But the chief minister had earlier announced a continuation of a subsidy of Rs 100 per liter for motorists.
CNG is an alternative to petrol, but Punjab lacks indigenous gas for CNG outlets, hence the demand for petrol is even greater in the country’s most populous province.
During the ongoing Gulf War, Iran and the US 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 risen due to lack of supplies. Middle Eastern countries such as Saudi Arabia, the UAE and Kuwait are also facing supply problems as their oil facilities have been hit. Iran is also an important oil supplier to China.
