Whether it is the budget of a family or the investment and bills of a flourishing business, they all depend upon the cost of diesel. It is one of the basics that acts as a building block of every aspect of living.
The recent fluctuations in the diesel price in Pakistan have every citizen of the country worried. However, what people are unaware of is the long list of reasons that cause a sudden hike in the cost of diesel in the market.
For your ease, the article below has been dedicated to knowledge regarding diesel prices and the cause behind the fluctuations. Keep reading to find out every bit of information.
Diesel Price Chart
|Diesel Type||Current Price|
|High Speed Diesel||312.38 PKR per litre|
|Light Speed Diesel||199.79 PKR per litre|
Factors Affecting Diesel Price in Pakistan
In the past year, the citizens of Pakistan have noticed an extreme rise in the prices of diesel across the country. This hike was not baseless, as there are many factors that cause an increase in the price of fuel.
International Crude Oil Prices
The first major factor behind the increase in diesel prices in Pakistan is the International crude oil prices. As we know that diesel comes from crude oil. Therefore, the price of crude oil in the international market affects the cost of diesel.
If there is an increase in crude oil in the international market, then the cost of diesel will increase in Pakistan. Similarly, a decrease in the cost of crude oil causes the price of diesel to be lower as well.
In the international market, crude oil is traded in US Dollars. Therefore, any fluctuations in the Pakistani currency also cause a hike in diesel prices.
If the value of Pakistani currency devalues, then the cost of crude oil in Dollars increases. So, the government has to pay more to import the oil to the country. So, they, in turn, increase the price of the fuel in the country.
The transportation cost of diesel is another major factor that plays a role in the increase in prices. Combined with the storage cost of the fuel, there will be a sudden hike in the cost of diesel in the country.
The taxes and policies imposed by the government also play a role in the hike in diesel prices. When the government changes the sales tax and increases it, the overall price of diesel also skyrockets. Similarly, customs duties and exercise duties are also a cause behind high diesel prices in the country.
Diesel is purchased in the form of crude oil, which is then refined to convert into diesel. Therefore, the cost of refineries also plays a role in the price of fuel in the country.
When there is a hike in the refining cost, and the maintenance of the crude oil, the price of diesel also escalates. Many production expenses are a factor in the refinery costs.
The demand and supply dynamics in the global market also affect the price of diesel in Pakistan. In addition to that, the sanctions on countries that produce oil can also affect the price of diesel.
Effects of High Diesel Prices in Pakistan
High Transportation Fares
The first major effect of high diesel costs is on the transportation fares across the country. Whether it is cab fares, delivery charges or the cost of commercial vehicles, everything increases with a hike in diesel cost.
Influence on Agriculture
The machinery used in the agriculture industry mainly operates on diesel. This includes tractors, pumps and other machines etc. Therefore, when there is a hike in the price of diesel in the country, it affects the agriculture department badly.
The farming operation cost way more than what they did in the previous years. Therefore, all the goods produced on farms also come at a higher price.
Increased Cost of Living
This goes without saying that an increase in diesel prices directly affects the cost of living of an average citizen of the country. From food to transportation, they have to pay nearly twice as much for every single thing. Therefore, the cost of living increases overnight with a hike in diesel prices.
High Construction Rates
Construction materials such as steel, cement, and bricks are transported through larger trucks that run on diesel. So, the hike in diesel prices increases the price of every raw material used in construction. This increases the overall prices of construction in the country.
Effect on Businesses
Diesel prices directly hit many businesses, especially small businesses. Many businesses have a low profit margin that allows them to keep investing further in the business to keep it running.
So, when there is a hike in diesel prices, the transportation cost, bills, and prices of raw materials increase, so the business does not offer nearly as much profit. This reduces the investment amount, which forces businesses to go into loss and end up shutting down.
What is the price of Diesel today in Pakistan in 2023?
The price of high-speed diesel in Pakistan is 312.38 PKR per liter today. Moreover, the price of light-speed diesel is 199.79 PKR per liter.
How high will diesel go in 2023?
It has been revealed recently that diesel will go as high as $4.23 per gallon in the international market in 2023. In Pakistani currency, this is approximately 326 rupees per liter.
Who is responsible for fuel price revisions in Pakistan?
The Department of Oil and Gas Regularity Authority (OGRA) is responsible for fuel prices in the country. They design the summary and present it to the PM of Pakistan, who approves or rejects it.