Fuel Price Forecast: Massive oil price hike estimated for first half of September

ISLAMABAD: Already burdened masses should get ready to bear a jolt in the form of massive oil price hike as per litre prices of all petroleum products are estimated to witness colossal hike during first fifteen days of September 2023.

According to sources in oil industry, petrol is expected to see a rise of of Rs 9.65 per litre, high-speed diesel (HSD) could rise by Rs 19.42 per litre, kerosene oil may witness an increase of Rs 13.82 per litre, and Light Diesel Oil (LDO) might go up by Rs 8.66 per litre. These estimates are based on the current tax structure, and if approved, would mean that consumers could be paying Rs 300.10 per litre for petrol, Rs 312.82 per litre for HSD, Rs 230.97 per litre for kerosene oil, and Rs 208.79 per litre for LDO, all starting from the next month of September 2023, sources added.

These proposed changes in petrol and diesel prices are grounded in the existing rates of Petroleum Levy and GST, with the Pakistan State Oil (PSO) projecting an exchange adjustment of Rs 2 per litre for petrol and Rs 7 per litre for diesel. In addition, the government currently imposes an Inland Freight Equalization Margin (IFEM) of Rs 4.13 per litre on petrol. It's essential to note that final price adjustments might vary if the Oil and Gas Regulatory Authority (OGRA) alters the IFEM.

At present, petrol is available at Rs 290.45/litre, HSD at Rs 293.40/litre, Kerosene oil at Rs 217.15/litre and LDO at Rs 199.79/litre.

It is relevant to note that Petrol (Gasoline) is primarily used as fuel for cars, motorcycles, and other vehicles.

High-Speed Diesel (HSD) is mainly used as fuel for heavy vehicles like trucks, buses, and industrial machinery. It is also used in generators and some agricultural equipment.

Kerosene Oil is used for cooking and lighting in households without access to electricity.

Light Diesel Oil (LDO) is used in industrial boilers, furnaces, and certain types of engines. It's commonly utilized in sectors like textiles, cement, and power generation.

It is pertinent to mention that the likely upcoming increases in the price of oil may have a significant influence on already burdened masses’ day-to-day expenses, household budgets, and inflation rates as a whole.

Besides, these proposed changes are subject to government approval and will depend on various factors, including global oil prices, currency exchange rates, and the financial implications for the energy sector.