Petrol prices keep climbing even as global oil slides

— Rate of petrol, light diesel oil increased by Rs6.72 and Rs0.43 a litre

— Prices of high-speed diesel, kerosene cut by Rs0.51 and Rs1.67 a litre

ISLAMABAD: The government increased the price of petrol by Rs6.72 a litre while slightly decreasing the high-speed diesel (HSD) by Rs0.51 due to “fluctuations in the international market and exchange rate variations”, a notification announced late on Monday.

With the latest announcement, the price of petrol has been increased from Rs227.19 to Rs233.91 per litre.

The HSD will now be available at Rs244.44. It earlier cost Rs244.95 per litre. Kerosene oil after a decrease of Rs1.67 will be available at Rs199.40 per litre, down from Rs201.07.

Light Diesel Oil price was also decreased by Rs0.43 and it will now be available at Rs191.75 per litre, up from the previous price of Rs191.32.

The new prices came into effect from midnight Tuesday, according to the notification issued by the Finance Division.

The increase is despite a slight easing in sky-high global oil costs which settled lower on Monday after disappointing Chinese economic data renewed concerns of a global recession that would be expected to reduce fuel demand, Reuters reported.

Brent crude futures settled down $3.05, or 3.1 percent, to $95.10 a barrel after dropping 1.5 percent on Friday. US West Texas Intermediate (WTI) crude settled down $2.68, or 2.9 percent, at $89.41 after dropping 2.4 percent in the previous session.

Brent futures were close to their lowest since before Russia sent troops into Ukraine on February 24, while WTI futures touched their lowest on Monday since early February.

The price of crude collapsed during the pandemic as travel restrictions punctured demand. That demand has since largely returned. The crisis in Ukraine has exacerbated the situation as various western countries shun Russian oil.

A drastic fall in the value of the rupee against the dollar after Shehbaz Sharif assumed office in April has also pushed up wholesale costs for petrol and diesel retailers.

The Finance Division said the government had decided to revise the existing oil prices following fluctuation in global oil prices and exchange rate variation. It added that new prices of petroleum products will be effective from August 16, 2022 (Tuesday).

Earlier, the sources claimed the prices of local petroleum products were likely to decrease by up to Rs15 per litre, as crude oil prices have declined in the global market.

The HSD is mainly used in the agriculture and transport sectors. Therefore, any increase in its prices will have direct inflationary impact on the life of the masses. The farmers are already facing high prices of electricity and the HSD might cause further hike in the cost of doing business, experts said.

They added that the additional increase in the price of diesel will add to the miseries of the people and farmers in the agriculture sectors. Due to the hike in the price of diesel, the transport fare might also go up, resulting in higher prices of commodities in the country.

The petrol is used in motorbikes and cars. Its alternate is compressed natural gas (CNG). The CNG retail outlets in Punjab have been operating on imported liquefied natural gas (LNG) and the cost of it have gone up manifold due to the conflict in Ukraine.

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