POL rates hiked despite ex-refinery price drop

ISLAMABAD: The federal government has increased the retail prices of petrol and high-speed diesel (HSD) despite a considerable drop in ex-refinery prices effective from April 25. According to documents, the price hike is primarily driven by increased petroleum levy (PL) on petrol and massive increase in inland freight margins (IFEM) rather than production costs. Over the previous week, the ex-refinery price of petrol declined by Rs3. 14 per litre, while HSD witnessed a reduction of Rs3. 44 per litre. However, instead of passing this relief on to the public, the government raised final prices through revised taxation and margin mechanisms. The IFEM on HSD has now reached Rs37. 75 per litre. The IFEM margin itself witnessed a raise of Rs30. 21 per litre over the previous review. Main HSD importer Pakistan State Oil (PSO) faces record-high HSD import cost at a record premium of up to $34 per barrel, driven by supply disruptions in the Strait of Hormuz. The adjustment has also be made in the PL on petrol, which has been increased to Rs107. 38 per litre on petrol from Rs 80. 61 per litre. On Saturday, a massive hike in fuel prices announced, raising both petrol and high-speed diesel by Rs26. 77 per litre, effective from April 25, 2026. The decision has drawn criticism, especially at a time when inflation continues to burden households. he Sensitive Price Index-based inflation continues to witness an upward trend, reaching 13. 98 percent during the week ending on April 23, up from 12. 16 percent calculated a week earlier, according to weekly data released on Friday by the Pakistan Bureau of Statistics (PBS). Copyright Business Recorder, 2026

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