Massive increase in fuel prices expected for July

ISLAMABAD: As inflation continues to burden the public, preparations are underway to drop a fresh “petrol bomb” on the masses, with a major hike in fuel prices expected from July 1.

According to sources in the Petroleum Division, prices of petroleum products may rise by up to Rs15 per litre for the next 15 days.

Diesel is likely to go up by Rs 15 per litre, while petrol may increase by Rs 11 per litre.

Govt hikes monthly fixed charges for gas consumers

OGRA (Oil and Gas Regulatory Authority) will send the summary of fuel price increases for the first fortnight for July to the Ministry of Petroleum today, after which the new prices will be announced later tonight.

The final decision will be made by the Finance Minister in consultation with the Prime Minister.

It is worth noting that the expected price hike is due to a surge in global crude oil prices and the devaluation of the Pakistani rupee.

According to Arif Habib Limited (AHL), the government might cushion the public from a steep fuel price hike by temporarily lowering the Petroleum Development Levy (PDL). This could bring a modest increase of around Rs 4.5 per litre on diesel and Rs 8 per litre on petrol from July 1. The full levy is expected to be restored once prices stabilise.

In a market note, AHL stated, “To ease price shocks, we believe the government may cut the Petroleum Levy temporarily, keeping the hike on July 1 limited to Rs4.5 per litre for diesel and Rs8 per litre for petrol. The levy would likely be restored in the next price review once global prices settle.”

Earlier, the federal government had announced a petroleum levy of Rs77 per litre and a carbon levy of Rs5 per litre on furnace oil. In addition, Rs2.5 per litre will be charged on both petrol and diesel, effective from July 1.

 Meanwhile the Oil and Gas Regulatory Authority (OGRA) has also officially issued a notification for a significant increase in gas prices for domestic and other consumer categories, with the new rates coming into effect from July 1, 2025.