Business owners and citizens may witness yet another hike in fuel prices. According to reports, the prices of Petrol, High-Speed Diesel (HSD) and Kerosene are all expected to rise for the next fortnight on Friday.

 

Owing to higher international prices of petroleum products, experts are predicting a hike of up to six rupees per litre. Reports state that the ex-depot price of petrol may increase by a conservative three rupees per litre while HSD and kerosene prices may rise sharply - approximately six rupees.

 

The hike will increase the price of petrol to 256.13 rupees per litre while the official rate of kerosene will come to rest at 169.25 rupees per litre. HSD will be priced at an extortionate 260.95 rupees per litre.

 

These are only estimates, however, as actual prices depend on final calculations, which will be made on January 31. Analysts cite the expected rise in prices as being associated with the bullish trend in the international market.

 

Over the past two weeks, Brent prices have surged by two dollars per barrel to rest over $76. The resultant rise in the average price of HSD is projected to sit close to $2.5 per barrel. However, the increase in petrol prices per barrel was just half a dollar.

 

As per reports, the import premium on petrol has gone up to $8.84 after officials tacked on an additional 40 cents to the premium. However, import premiums on diesel and petrol have not been altered.

 

Islamabad charges a tax of approximately 76 rupees per litre on both HSD and petrol. The bulk of this tax, a staggering 60 rupees per litre, is charged under the category of ‘Petroleum Development Levy’ (PDL), whereas the other charge of 16 rupees goes towards customs duty fees.

 

Pakistan is a net importer of petroleum-based fuels. However, it produces some of its fuel, too. Interestingly, the customs duty is levied on fuel produced domestically as well.

 

Islamabad does not charge consumers General Sales Tax (GST) on any petroleum products. However, fuel suppliers and distributors tack on an additional 17 rupees on each litre as a markup.

 

The rise in petrol prices cannot be attributed to fluctuations in the rupee's value, as the exchange rate has enjoyed relative stability for over a year now. This will reduce the impact of the rising petroleum import bill.

 

Business owners involved in fuel-intensive operations are expected to suffer. For instance, transportation companies will be hit hard by the HSD price hike as their operating costs will rise, causing their profit margins to shrink.