Double-digit hike in fuel prices likely from Sept 1

ISLAMABAD: With the exchange rate impact of Rs12 by virtue of the increasing US dollar’s value from August 16, 2023, coupled with a slight increase of POL products in the international market, OGRA is most likely to recommend the raise of Mogas (petrol) price by Rs12 per litre and diesel by Rs14.83 per litre for the next fortnight starting from September 1, 2023.

“This would expose the masses to a further surge in inflation making the lives of the masses more miserable. At present the inflation rate is at 28 percent,” a senior official of the Energy Ministry told The News. “However, the government which is already under tremendous pressure because of the countrywide protests over the inflated electricity bills, may reduce the increase or stop it. If the government does that it would be considered that the caretaker government has defaulted on the IMF terms and conditions for its $3 billion standby agreement (SBA) loan under which the government is bound to pass fluctuation in prices of the POL products. The dollar’s value has reached Rs301.75 in the interbank while it is selling at around Rs319 in the open market.”

As per the data, in the last two fortnights of August, the petrol price has already increased by Rs37.50 and diesel by Rs40 per litre. “However, the authorities last time worked out the POL prices at the value of the dollar at Rs287 and now they have decided to calculate the prices of POL products from September 1, 2023, at Rs299. The big impact of the exchange rate of Rs12 will be reflected in the hike in POL prices. The LC confirmation charges that have increased by 10 percent are also embedded in the price of PSO petroleum products,” the Energy Ministry official told The News. “The existing price of Mogas stands at Rs290.45 per litre which may go up by Rs12 per litre to Rs Rs302.45 per litre. Likewise, the HSD price which stands at Rs293.40 per litre is also likely to increase by Rs14.83 per litre to Rs308.23 per litre.” Diesel price is highly inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube wells and threshers and particularly adds to the cost of vegetables and other eatables. On the other hand, petrol is also mostly used in private transport, small vehicles, rickshaws and two-wheelers and directly affects the budget of middle and lower-middle-class citizens.