ISLAMABAD - The federal government on Saturday once again increased the prices of petroleum products up to Rs3.33 per litre for the remaining 15 days of the current month (January), which would further fuel the inflation rate in the country.

According to a notification issued by the Ministry of Finance, after the increase of Rs 3.01 per litre, the price of MS petrol will go up to Rs147.83 per litre from Rs 144.82 per litre. HSD price will increase by Rs3 per litre to Rs144.62 per litre from Rs 141.62 per litre. Kerosene (SKO) will jump by Rs 3 per litre to Rs116.48 per litre from Rs 113.53 per litre. Light diesel oil will go up by Rs3.33 per litre to Rs114.54 per litre Rs 111.21 per litre. 

“The petroleum products are showing fourth straight weekly gain and witnessed an increase of 6.2% just in last week in the international market. Presently, at the highest level since last year,” said the ministry. The existing Sales Tax rate and Petroleum Levy on various petroleum products are much below the budgeted targets. 

Against the recommendation of OGRA for increase of Rs5.52 per litre in petrol and Rs6.19 litre in HSD prices, the Prime Minister has directed to absorb the international prices through further cut in Sales Tax from last fortnight. The Finance Ministry will take Rupees 2.6 billion revenue hit due to the reduced Sales Tax. 

Therefore, the government has decided to make partial increase in the prices of the petroleum products in order to provide relief to the end consumers. This was the second increase in oil prices within current months as the government on January 1 has increased the prices by Rs4 per litre.

The government’s decision would fuel the inflation rate in the country, which is already on the higher side. The inflation rate had climbed to 22-month highest level of 12.3 per cent in December 2021 over a year ago mainly due to the continuous depreciation in local currency, increase in electricity and oil prices and high international commodities prices.