The reasons behind the latest increase in petrol and diesel prices in Pakistan have been revealed. According to an official document, the price hike is mainly due to an increase in freight margin and customs duty, while other levies have been maintained.

Petrol prices rise due to increased costs

The freight margin on petrol has been raised by Rs2.04 per liter, moving from Rs6.65 to Rs8.69 per liter. In addition, the customs duty on petrol has been increased by Rs1.35 per liter.

Despite these increases, the carbon levy remains at Rs2.50 per liter, while the petroleum levy has been maintained at Rs78.02 per liter.

The distribution margin on petrol stands at Rs7.87 per liter, and the dealer margin remains unchanged at Rs8.64 per liter, the document added.

Diesel prices also see major adjustments

The document highlights that the customs duty on diesel has been raised by Rs2.75 per liter. Meanwhile, the exchange rate adjustment for diesel has decreased by Rs1.12 per liter.

The freight margin on diesel has been hiked by Rs2.09 per liter, increasing from Rs4.10 to Rs6.19 per liter. In addition, an extra margin of 32 paisa per liter has been imposed.

Also Read: Petrol, diesel prices increased for next fortnight

However, the carbon levy, distribution margin, and dealer margin on diesel have all been retained at previous levels.

Why these adjustments matter

The government’s pricing mechanism for petroleum products takes into account freight costs, customs duty, levies, and margins. While the latest changes are focused on freight and duty adjustments, authorities have opted not to alter petroleum and carbon levies significantly.

On Tuesday night, the government increased the prices of petrol and high-speed diesel for the next fortnight, beginning October 1 (Wednesday), according to a notification issued by the Ministry of Finance.

The price of petrol has increased by Rs4.70, bringing the new rate to Rs268.68 per litre. The price of high-speed diesel has increased by Rs4.40, taking the new rate to Rs276.81 per litre.

The revised prices will remain in effect for the first half of October.