As the New Year approaches, fuel prices in Pakistan are expected to rise due to fluctuations in the international oil market. High-speed diesel (HSD), kerosene, and light diesel oil (LDO) are projected to see a price hike of around Rs4 to Rs5 per litre for the first fortnight of 2025. However, the price of petrol is expected to remain stable with a minor change of just Rs1 per litre, depending on final calculations by December 31.
Expected Price Hike for Diesel and Kerosene
The rise in fuel prices is mainly due to the impact of international oil price trends. For example, HSD and LDO prices have increased slightly in the global market, and kerosene refinery cost is also slightly higher. These increases will reflect in the prices of these fuels domestically.
| Fuel Type | Expected Price Increase | Current Price |
|---|---|---|
| High-Speed Diesel (HSD) | Rs4 per litre | Rs255.38 per litre |
| Kerosene | Rs5 per litre | Rs300+ per litre (estimated) |
| Light Diesel Oil (LDO) | Rs5 per litre | Rs290+ per litre (estimated) |
Petrol Price Expected to Stay the Same
In contrast to diesel and kerosene, the price of petrol is likely to remain relatively stable. While the ex-depot price of petrol could change by just Rs1 per litre, it is expected to remain within a narrow range. The small fluctuation in petrol prices is due to the adjustment mechanism used for inland freight equalisation, which helps maintain uniform prices across the country.
| Fuel Type | Price Change Expected |
|---|---|
| Petrol | Rs1 per litre increase or decrease |
Currently, the ex-depot price of petrol stands at Rs252.10 per litre, while HSD is priced at Rs255.38 per litre.
Impact of Fuel Price Hike on Daily Life
The rising fuel prices will have significant consequences for various sectors, especially transportation. Diesel is primarily used in heavy transport vehicles such as trucks, buses, and tractors. These vehicles play a critical role in the movement of goods, including vegetables and other daily necessities. As a result, any increase in diesel prices tends to directly affect the prices of goods and can lead to inflation, impacting the general public.
Petrol, on the other hand, is used more in private transport, including cars, motorcycles, and rickshaws. A price increase here may put additional strain on the budgets of middle- and lower-middle-class families who rely on private vehicles for commuting.
| Fuel Type | Primary Usage | Impact |
|---|---|---|
| Diesel (HSD) | Heavy transport, trucks, buses, tractors | Increases cost of goods, including food items |
| Petrol | Private vehicles, motorcycles, rickshaws | Affects transportation costs for individuals |
Government Taxation on Fuels
Currently, the government imposes a tax of approximately Rs76 per litre on both petrol and HSD. This tax plays a role in the final price of the fuels and contributes to the overall cost burden for consumers. The tax burden on fuel often adds to the price hikes, especially when international oil prices rise, as it increases the overall cost for consumers.
| Fuel Type | Government Tax |
|---|---|
| Petrol | Rs76 per litre |
| HSD | Rs76 per litre |
Summary
As 2025 begins, Pakistan is likely to face an increase in diesel, kerosene, and LDO prices. While petrol prices may stay stable with a small adjustment, the higher costs of diesel and kerosene will impact daily life, particularly in transportation and the cost of goods. With the government taxing these fuels heavily, the price increases are bound to affect the middle and lower-income groups the most. The government may need to carefully consider these price adjustments to mitigate inflationary pressures and keep essential goods affordable.
