The government has announced an increase in the prices of petroleum products for the next fortnight, 24NewsHD TV channel reported.

According to a press release issued by the Finance Division, the petrol price in Pakistan has gone up by Rs9.99 per litre for the next fortnight while the cost of the High-Speed Diesel (HSD) surged from Rs277.45 per litre to Rs283.63 with an increase of Rs6.18.

"The Oil & Gas Regulatory Authority (OGRA) has worked out the consumer prices, based on the price variations in the international market," the statement read. The news new fuel prices will come into effect from July 16.

A report citing sources said that the prices of petrol and HSD increased in the international market by about $4.4 and $2 per barrel respectively in the last fortnight. Depending on the final calculation and existing tax rates, the price of petrol was projected to rise by Rs7.60 per litre and that of HSD by Rs3.50.

The government jacked up the maximum limit of petroleum development levy (PDL) to Rs70 per litre in the Finance Bill to collect Rs1.28 trillion in the current fiscal year against Rs960bn collection during the previous year, almost Rs91bn higher than the Rs869bn budget target.

During the current fortnight, import premiums on both petrol and HSD remained unchanged at $9.60 and $6.50 per barrel, respectively. On the other hand, the rupee depreciated by about 17 paisa against the dollar during the fortnight.

On June 30, the government increased the prices of petrol and HSD prices by Rs7.45 and Rs9.56 per litre. Between May 1 and June 15, petrol and high-speed diesel prices were reduced by about Rs35 per litre and Rs22 per litre, respectively.

The government currently charges about Rs77 per litre tax on both petrol and HSD. Although the general sales tax (GST) is zero on all petroleum products, the government charges Rs60 per litre PDL on both products, which normally impacts the masses.The government is also charging about Rs17 customs duty on a litre of petrol and HSD, irrespective of their local production or imports.

Petroleum and electricity prices have been the key drivers of high inflation. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers. An increase in diesel price is considered highly inflationary as it is mostly used in heavy transport vehicles and particularly adds to the prices of vegetables and other eatables.