ISLAMABAD: The government may once again raise taxes on petrol to soften the impact of a sharp increase in diesel prices expected later this week, as authorities seek to contain inflationary pressures.
Informed sources said that although international crude prices have edged up slightly amid regional tensions, high-speed diesel (HSD) prices remain elevated for the remainder of the current fortnight. As a result, prices of HSD, kerosene and light diesel oil (LDO) are projected to rise in the upcoming price revision on January 31.
Based on existing tax rates, ex-depot prices of HSD, LDO and kerosene are estimated to increase by around Rs9.50, Rs7 and Rs3.70 per litre, translating into hikes of about 3.7 per cent and 5 per cent, depending on final calculations. Petrol prices, however, are expected to decline marginally by about 40 paise per litre.
Officials said the government may be advised to shift at least half of the projected diesel price increase onto petrol through higher petroleum levy, as diesel has a stronger inflationary impact due to its widespread use in transport and agriculture. The government has followed a similar approach in recent revisions, widening the tax gap between petrol and diesel to protect overall price stability.
Story by Khaleeq Kiani
