Government hikes petroleum prices by Rs8.14

Nov 5, 2021: Setting a new record, the government on Thursday night hiked petroleum prices by Rs 8.14 per liter to ensure resumption of the IMF program.

The decision was announced by the Ministry of Finance after 1:30 a.m. [Friday]. The prime minister had earlier this week halted the increase in response to protests by the Tehreek-e-Labaik Pakistan.

On the basis of tax rate, import parity price and exchange rate, the government increased the prices of petrol and high speed diesel by Rs 8.03 and Rs 8.14 per liter respectively. Similarly, prices of kerosene and light diesel were increased by Rs6.27 and Rs5.72 per liter respectively.

Under the notification, the ex-depot price of petrol was fixed at Rs 145.82 per liter instead of Rs 137.79, an increase of Rs 8.03. The product is mostly used in private transport, small vehicles, rickshaws and two-wheelers and has a direct impact on the budgets of the middle and lower middle class.

The ex-depot price of HSD was fixed at Rs 142.62 per liter instead of Rs 134.48, an increase of Rs 8.14. Its price is considered extremely expensive as it is mostly used in heavy transport vehicles, trains and agricultural engines such as trucks, buses, tractors, tube wells and threshers.

The ex-depot price of kerosene was fixed at Rs 116.53 per liter instead of Rs 110.26, an increase of Rs 6.27. Similarly, the ex-depot rate of Light Diesel Oil (LDO) has been increased from Rs 108.26 to Rs 114.07 per liter, an increase of Rs 5.72. LDOs are used by flour mills and one or two power plants.

This is the first time in the history of the country that the prices of all petroleum products are above Rs 110 per liter.

Informed sources said that the major increase was mainly due to reduction in exchange rate and increase in tax rate.

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