Govt hikes petrol prices by up to Rs35 per litre

January 29, 2023 (MLN): The federal government on Sunday decided to increase the price of petroleum products by up to Rs35 per litre. 

While announcing the news prices during a televised address, the Federal Minister for Finance and Revenue Senator Ishaq Dar announced the news prices and said, "The new prices will be effective from today at 11:00 am." 

It is pertinent to note that the government revises petroleum prices every fortnightly but in the wake of speculations regarding the steep surge in prices, the authorities had to announce the prices earlier. 

During his speech, he also mentioned that social media is abuzz with speculation about a 50 Rupee hike in the cost of gasoline and diesel, causing reports of market shortages created artificially.

The minister stated that the devaluation of the Pakistani rupee last week, combined with an 11% rise in international petroleum product prices, led to the decision to increase the minimum price of petrol, diesel, and kerosene oil.

He reminded that these prices had not been raised for the past four months and even saw a decrease, but the Prime Minister, Shehbaz Sharif, has now directed to raise the minimum prices.

Accordingly, the prices of petrol, diesel, kerosene oil, and light diesel oil stood at Rs249.80, Rs262.80, Rs189.83, and Rs187 per litre. 

Govt announced new prices of Petroleum Products with effect from 11.00 hrs, 29 Jan ,2023.

High Speed Diesel-Rs 262.80 per litre

MS Petrol —Rs 249.80 per litre

Kerosene Oil -Rs 189.83 per litre

Light Diesel Oil - Rs 187 per litre

— Ministry of Finance (@FinMinistryPak) January 29, 2023

Sharing his view on the surge in petrol prices, Fahad Rauf, Head of Research at Ismail Iqbal Securities said, this increase is in-line with expectations.

"This is only a partial increase as it does not incorporate recent exchange rate depreciation. More increase to come in mid-Feb," he added.

Petrol and Diesel price increased by Rs 35 per litre, in-line with expectations.

This is only a partial increase as it does not incorporate recent exchange rate depreciation.

More increase to come in mid feb#petrol #diesel #PetrolDieselPrice https://t.co/xsepxZj2Uh pic.twitter.com/FCEIKYHllu

— Fahad Rauf (@analystfahad) January 29, 2023

To note, removing the dollar cap and switching to a free float exchange rate system has forced the Pakistani rupee (PKR) down the abyss as the currency lost 32.9 rupees in five straight sessions to settle the week’s trade at PKR 262.6 per USD compared to previous week’s close of PKR 229.67 per USD.

Within the last two sessions, the local unit has slashed its value against the US dollar by 31.7 rupees as a result of the decision pertaining to the removal of the dollar cap in the open market on Wednesday. Later, on Thursday the currency also started taking a nosedive in the interbank market, reflecting the government’s clear intention to implement a free-floating exchange rate.

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