Pakistan is expected to raise petroleum product prices starting December 1, 2024, driven by a recent surge in international oil prices. The adjustment will follow the fortnightly review of petroleum prices, with the next update scheduled for November 30, 2024. The revised prices will remain effective from December 1 to December 15, 2024.
According to estimates provided by Oil Marketing Companies (OMCs), petrol prices could increase by Rs 3.00 per litre, climbing from Rs 248.38 to Rs 251.38 per litre. Similarly, the price of high-speed diesel (HSD) is projected to rise by Rs 2.87 per litre, from Rs 255.14 to Rs 258.01 per litre.
Conversely, the prices of kerosene oil (SKO) and light diesel oil (LDO) are anticipated to decrease marginally. SKO may see a reduction of 11 paisa per litre, from Rs 165.60 to Rs 165.49, while LDO might drop by 4 paisa per litre, from Rs 152.21 to Rs 152.17 per litre.
The price adjustments are influenced by a rise in the Inland Freight Equalization Margin (IFEM), with increases of Rs 7.50 per litre for petrol and Rs 4.15 per litre for HSD factored into the calculation. Additionally, a premium of $9.80 per barrel on petrol contributes to the revised pricing estimates.
In previous reviews, the Pakistan government absorbed certain increases in IFEM to cushion inflationary pressures on the public. However, the recent surge in global oil prices may limit the government’s ability to do so in the upcoming review.
The Oil and Gas Regulatory Authority (OGRA) of Pakistan will present its recommendations to the government, with the final decision on petroleum prices expected to be announced on November 30, 2024.
This potential increase comes at a time when Pakistan is grappling with inflationary challenges, and any upward adjustment in fuel prices could further strain household budgets and transport costs. The government’s approach to balancing fiscal pressures with public relief remains closely watched.