Pakistan is anticipated to raise petroleum product prices starting December 1, 2024, as global oil prices continue to climb. The price adjustment will follow the routine fortnightly review of petroleum prices, with the updated rates scheduled for announcement on November 30, 2024. These revised prices will be effective from December 1 to December 15, 2024.
According to estimates from Oil Marketing Companies (OMCs), petrol prices are likely to increase by Rs 3.00 per litre, bringing the price from Rs 248.38 to Rs 251.38 per litre. Similarly, high-speed diesel (HSD) is expected to rise by Rs 2.87 per litre, from Rs 255.14 to Rs 258.01 per litre.
Conversely, slight reductions are anticipated for kerosene oil (SKO) and light diesel oil (LDO). SKO prices may decrease by 11 paisa per litre, from Rs 165.60 to Rs 165.49, while LDO prices could drop by 4 paisa per litre, from Rs 152.21 to Rs 152.17 per litre.
The primary driver behind the anticipated price hikes is an increase in the Inland Freight Equalization Margin (IFEM), which has risen by Rs 7.50 per litre for petrol and Rs 4.15 per litre for HSD. Additionally, a premium of $9.80 per barrel on petrol has contributed to the recalculated pricing.
In earlier reviews, the government absorbed some IFEM increases to mitigate the burden on the public. However, the recent surge in international oil prices might limit its capacity to provide similar relief this time.
The Oil and Gas Regulatory Authority (OGRA) will finalize its recommendations to the government, with the official decision expected on November 30, 2024.
This potential price hike comes at a time when Pakistan is struggling with inflationary pressures. An increase in fuel costs could lead to higher transportation expenses and further strain household budgets. The government faces the critical challenge of balancing fiscal constraints with public welfare, and its handling of the upcoming review is expected to draw close scrutiny.
