Fuel prices set to rise from June 16; govt forms committee to monitor supply after global surge

Petrol and diesel prices are likely to see an increase for the next fortnightly period, starting from June 16, as the global oil market experienced an unprecedented surge due to the escalating situation in the Middle East after Israel and Iran traded missiles in each other’s territory. 

As per sources, the ex-depot price of high-speed diesel (HSD) might see a Rs5 per litre hike. 

At present, the ex-depot price of petrol stands at Rs 252.63 per litre while the current ex-depot price of HSD is Rs 254.64 per litre, which impacts the transport sector, particularly heavy vehicles like trucks, buses, and agricultural machinery. 

The price hike is likely to further contribute to inflation, particularly in food and transport sectors, as HSD is a key component in the cost of transporting goods.

Despite zero General Sales Tax (GST) on petroleum products, the government is charging approximately Rs94 per litre in duties and taxes. These include a Petroleum Development Levy (PDL) of Rs77.01 per litre on diesel and Rs78.02 on petrol and high-octane products. 

Additionally, customs duties of Rs16 per litre are applied to both petrol and HSD, whether locally produced or imported. Oil companies and dealers also receive about Rs17 per litre in distribution and sale margins.

In a related development, the federal government has set up a high-level committee to monitor fuel prices, secure sufficient supplies, and assess the economic fallout for Pakistan in light of the recent spike in global oil prices triggered by Israel’s military action against Iran. 

Chaired by the finance minister, the 16-member committee includes senior officials from key sectors such as Petroleum, Power, the State Bank of Pakistan, FBR, and executives from OGRA, PARCO, PSO, and HUBCO. 

The committee will focus on tracking petroleum futures, evaluating foreign exchange impacts, and developing strategies to stabilize the domestic market amid rising geopolitical tensions.

According to a memorandum from the Ministry of Energy (Petroleum Division), the committee’s responsibilities also include formulating contingency plans to avoid fuel supply disruptions and conducting a fiscal impact analysis if the crisis continues. 

Weekly reports will be submitted to the Prime Minister, with the first meeting scheduled for June 15 at the Ministry of Finance.