KARACHI: As tensions in the Middle East continue to simmer, the repercussions are felt worldwide, particularly in the realm of fuel prices. On Monday, April 15, consumers are bracing themselves for a significant uptick at the pump, with petrol and high-speed diesel (HSD) prices expected to soar by approximately Rs2.50 and Rs8.50 per litre, respectively, for the next fortnight.
Sources knowledgeable about the matter reveal that the surge in international markets has been substantial, with petrol and HSD prices witnessing a spike of $4 and $4.50 per barrel, respectively, over the last two weeks. These escalations, predating the latest bout of geopolitical tension, set the stage for the impending price hikes.
Notably, despite a decline in import premiums and a marginal strengthening of the exchange rate, the impact on domestic prices remains unavoidable. The import premium on petrol has notably plummeted by nearly 21%, dropping to $10.7 per barrel, while the rupee has seen a modest appreciation of about 40 paisa against the dollar, settling at Rs278.20.
As a result of these fluctuations, petrol prices are anticipated to rise by Rs2.50 to Rs2.80 per litre, while HSD is poised for an increase ranging between Rs8 and Rs8.50 per litre, pending final calculations and adjustments.
In recent pricing assessments, the cost of petrol surged to $98.5 per barrel, reflecting a $4 increment, while HSD prices climbed to $102.9 per barrel, marking a $4.50 surge. This trajectory indicates a significant strain on consumer wallets, compounded by previous price adjustments imposed almost a fortnight ago.
During the previous fortnight leading up to April 15, the government implemented a Rs9.66 per litre hike in petrol prices while concurrently reducing HSD rates by Rs3.32 per litre. These adjustments, however, barely scratch the surface of the mounting financial burden facing consumers.
The government, in its bid to meet fiscal targets and comply with International Monetary Fund (IMF) commitments, has aggressively pursued petroleum levies. Currently capped at Rs60 per litre, these levies have become a primary revenue stream, with an ambitious target of Rs869 billion set for the current fiscal year.
Despite having already collected approximately Rs475 billion in the first half of the fiscal year, the government remains steadfast in its pursuit of additional revenues, eyeing a projected collection of Rs970 billion by year-end. This relentless drive for revenue highlights the fiscal pressures confronting the government amidst a volatile global landscape.
With taxes on petrol and HSD hovering around Rs82 per litre, consumers find themselves caught in the crossfire of geopolitical tensions and fiscal imperatives, grappling with the inevitable fallout reflected in their fuel bills. As global uncertainties persist, the specter of escalating fuel prices looms large, casting a shadow over the economic landscape.