Diesel price rises as government increases petroleum levy

The federal government has increased the price of high-speed diesel after raising the Petroleum Development Levy (PDL) on the fuel by Rs1 per litre

ISLAMABAD: The federal government has increased the price of high-speed diesel after raising the Petroleum Development Levy (PDL) on the fuel by Rs1 per litre, adding further pressure on consumers and transport-related costs.

Following the latest adjustment, the price of high-speed diesel has gone up by 54 paisas per litre, reaching Rs382.89 per litre. The increase comes despite a decline in the ex-refinery price of diesel, with the higher petroleum levy pushing up the final price paid by consumers.

The government has raised the diesel levy by Rs1 per litre as part of the latest petroleum price adjustment. The PDL on high-speed diesel now stands at Rs76.28 per litre.

The latest increase follows another adjustment made on August 12, when the government raised the petroleum levy on diesel by Rs2 per litre. The successive increases have resulted in a significant rise in the levy component of the retail price.

Petrol price reduced

In contrast to diesel, the government has reduced the price of petrol by 94 paisas per litre. The price of petrol has now been fixed at Rs324.98 per litre.

The Petroleum Development Levy on petrol, however, has remained unchanged at Rs80 per litre.

The differing price movements for petrol and diesel are largely linked to changes in their respective pricing components. While the ex-refinery price of diesel declined, the increase in the government levy more than offset the reduction, resulting in a higher retail price.

The latest adjustment is expected to have an impact on transportation and logistics costs because diesel is widely used by commercial vehicles, buses, trucks, agricultural machinery and other heavy transport.

Higher diesel prices can also influence the cost of goods and services by increasing transportation expenses across supply chains. Meanwhile, the reduction in petrol prices provides limited relief to motorists using petrol-powered vehicles.

The government periodically reviews petroleum prices based on international oil prices, exchange-rate movements, taxation and other components of the domestic pricing mechanism. The latest changes reflect the impact of adjustments in the petroleum levy and ex-refinery prices on consumers.