ISLAMABAD – Fuel continues to squeese household budgets and dent commercial sector since start of Iran war, and Pakistanis are paying Rs391.30 for a litre, with a large chunk of that amount goes beyond the actual cost of the fuel.
Petrol price revealed gap between what the fuel costs before government charges and what motorists actually pay at petrol stations, with more than Rs136 added to every litre. According to official pricing data, the underlying cost of petrol is Rs254.96 per litre. Yet the pump price has been set at Rs391.30 per litre.
That means consumers are paying Rs136.34 more per litre than the basic cost of the product. But where does this additional amount come from? The largest component is the petroleum levy, which stands at Rs80 per litre.
Another Rs5 per litre is charged as Climate Support Levy, while customs duty adds Rs23.68 to the price. The remaining difference comes through several industry and distribution-related charges.
These include Rs7.91 per litre as Inland Freight Equalisation Margin, Rs7.87 as the Oil Marketing Company margin and Rs9.98 as the dealer margin. There is also an exchange adjustment of Rs1.90 per litre in the pricing calculation. Rs254.96 basic cost of petrol rises to Rs391.30 at the pump after these various charges are incorporated.
The same pricing structure is visible in the case of High-Speed Diesel. The official underlying cost of HSD is Rs285.85 per litre, but consumers are paying Rs408.53 per litre. This creates a Rs122.68-per-litre difference between the basic cost and the retail price.
The breakdown is important because petrol and diesel prices affect far more than motorists. Fuel costs feed directly into transport fares, freight charges, business operating expenses and household budgets. The final pump price is pushed by international oil prices and exchange-rate movements, but these are only part of the calculation.
How Much Petrol Relief is Coming for Pakistanis? PM Shehbaz Signals IMF Backing for Subsidy
