Petrol, diesel prices may go up by Rs7-10 per litre

ISLAMABAD: Another possible blow to the masses is on the cards as the price of motor gasoline (petrol) is likely to be increased by Rs7 per litre and high speed diesel (HSD) by Rs10 per litre from October 16.

“We have worked out the huge increase in the price of both the products keeping in view the first 10 days data showing that the refined products prices have gone up from $79 to $91 per barrel from October 1,” sources in the industrial sector told The News.

They said normally the POL prices are worked out based on the 13 days data, and in the next three days, the bullish trend in oil prices would continue, however, it all depends on how much subsidy the government picks this time for passing a reasonable increase in the petrol and diesel prices against the expected huge hike.

The sources said since the government is desirous of making the IMF programme operational and is in talks with the IMF, it may not be able to reduce the increased POLprices this time.

The government has so far in the last two fortnights passed the hike in petrol price by Rs 9 per litre and high speed diesel by Rs 7.01 per litre on to the consumers from September 16. It increased the MS price by Rs5 per litre to Rs 123.30 per litre and HSD by Rs5.01 per litre to Rs 120.04. It also raised from October 1, the motor gasoline price by Rs4 per litre to Rs127.30 per litre and HSD by Rs2 to Rs122.05 per litre. And if the government increases further the POL prices from October 16 as has been worked out, it would be the third hike in POL prices in a row.

The government fixes the POL products prices on a fortnightly basis based on the recommendation of Oil and Gas Regulatory Authority (OGRA). The perpetual devaluation of Pak Rupee against the US dollar is also causing the surge in POL products in the country.

The industrial sources further said that there seems no respite in oil prices in the global market as so far the Light Arabian (LA) crude oil has reached $ 79.5 per barrel average. However, in the case of Pakistan, there are three factors which are causing a huge surge in oil prices in the country that include high FOB (free on board) $85 + $6.8 premium and Rs 171 per dollar exchange rate, added the sources. They said the HSD premium is reasonable at 2.2 percent but has an unprecedented FOB price and the latest MS price now is at $ 88 FOB.

According to the West Texas Intermediate, crude futures topped $80 on the last Friday for the first time since 2014. Oil went up more than 60 percent for 2021 as demand rebounds, while supply remains tight. The industrial experts say unless the OPEC acts to meaningfully increase the supplies, the prices will stay higher still.