Consumers in Pakistan are paying significantly more than the base cost for petrol and high-speed diesel (HSD) due to heavy government levies and industry margins, according to officials.
The base price of petrol stands at Rs. 133.22 per litre, but the final retail price has surged to Rs. 258.17 per litre. Similarly, the base cost of high-speed diesel is Rs. 158.55 per litre, yet consumers pay Rs. 275.70 per litre at the pump.
This substantial increase is primarily attributed to various taxes and margins imposed on the fuels. For petrol, a total of Rs. 124.95 per litre is added through government levies and industry charges, while for HSD, Rs. 117.15 per litre is added under the same categories.
The government currently imposes a petroleum levy of Rs. 84.40 per litre on petrol and Rs. 76.21 per litre on diesel. Customs duties amount to Rs. 13.31 per litre on petrol and Rs. 15.68 per litre on diesel. Additionally, a climate support levy of Rs. 2.50 per litre applies to both fuels.
Read More: Pakistan Fuel Oil Exports Hit Record High
Consumers also bear a dealer commission of Rs. 8.64 per litre on both petrol and diesel. Oil marketing companies earn a margin of Rs. 7.87 per litre on petrol. The inland freight equalization margin (IFEM), which accounts for transportation costs, adds Rs. 8.23 per litre to petrol prices and Rs. 6.25 per litre to diesel prices.
Despite these heavy levies and margins, no sales tax is currently charged on petrol or diesel, which somewhat limits the price escalation.
The high cost of fuel has significant implications for consumers and the economy, as elevated fuel prices affect transportation costs and the prices of goods and services across the country.
