ISLAMABAD: Making a new record, the government on Thursday night increased petroleum prices by up to Rs8.14 per litre with immediate effect to ensure revival of the IMF programme.

       The decision was announced after 1:30am [Friday] by the ministry of finance. The prime minister had early this week put on hold the increase in the wake of protest by the Tehreek-i-Labbaik Pakistan.

       On the basis of tax rates, import parity price and exchange rate, the government increased the price of petrol and high speed diesel by Rs8.03 and Rs8.14 per litre, respectively. Similarly, the prices of kerosene and light diesel oil were increased by Rs6.27 and Rs5.72 per litre, respectively.

       Under the notification, the ex-depot price of petrol was fixed at Rs145.82 per litre instead of Rs137.79, showing an increase of Rs8.03. The product is mostly used in private transport, small vehicles, rickshaws and two-wheelers and has a direct bearing on the budget of middle- and lower-middle class.

       The ex-depot price of HSD was fixed at Rs142.62 per litre instead of Rs134.48, up Rs8.14. Its price is considered highly inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tubewells and threshers.

       The ex-depot price of kerosene was set at Rs116.53 per litre instead of Rs110.26, up by Rs6.27. Likewise, the ex-depot rate of light diesel oil (LDO) was increased to Rs114.07 per litre from Rs108.26, showing an increase of Rs5.72. LDO is consumed by flour mills and a couple of power plants.

       This is the first time in the country’s history that prices of all the petroleum products are above Rs110 per litre.

       Informed sources said the major increase was mainly because of exchange rate loss and increase in tax rates.

       Published in Dawn, November 5th, 2021