The federal government on Wednesday increased the price of petrol and high-speed diesel (HSD) by Rs2.07 and Rs2.99 per litre respectively despite a recommendation from the Oil and Gas Regulatory Authority (Ogra) to reduce the tariffs.
The government also increased the price of light diesel oil (LDO) by Rs9.79 per litre whereas the price of kerosene oil was raised by Rs10.92. The new rates are effective from September 1 (today).
With the latest announcement, the price of petrol has been increased from Rs233.91 to Rs235.98 per litre; LDO from Rs191.75 to Rs201.54 per litre whereas the price of HSD has been raised from Rs244.44 to Rs247.43. The price of kerosene oil has been increased from Rs199.40 to Rs210.32 per litre.
In the past, the sharp devaluation of the rupee against the dollar had also been a major factor in determining oil prices.
In recent days, the position of the rupee had strengthened against the dollar. Despite that, there had been an increase in the price of petrol and HSD which is widely used in the agriculture and transport sectors in the country.
As the HSD is mainly used in agriculture and transport sectors, an increase in its prices will have a direct inflationary impact on the life of the masses.
Due to the hike in the price of diesel, transport fares have already gone up, resulting in higher prices of commodities in the country.
Petrol is used in motorbikes and cars. Its alternative is compressed natural gas (CNG). The CNG retail outlets in Punjab have been operating on imported liquefied natural gas (LNG) and the cost of it has gone up manifold due to the Russia-Ukraine conflict.
Even, Pakistan has been unable to secure LNG contracts on a spot basis due to the highest-ever prices of commodities in the international market. Pakistan LNG Limited – a state-run company – had failed to arrange the LNG cargoes even during the last winter season.
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Australia had been a major gas exporter. However, as its regulator put curbs on gas exports, further shortage of gas in the global market is expected.
In this situation, Pakistan may not be able to secure contracts for the upcoming winter season. Therefore, the next winter will also be tough for the commuters.
Moreover, consumers in Punjab will be relying more on petrol and a fresh increase in its price will have a negative impact on the life of those using motorcycles and cars in the province, experts said.
Kerosene oil is used in remote areas, where liquefied petroleum gas (LPG) was not available for cooking purposes. The army is a key user of kerosene oil in remote areas, like the northern areas. The poor population also uses this fuel in the northern parts of Pakistan.