AA predicts massive fuel hike

AA predicts massive fuel hike

Breaking the conventional trend of diesel being more accessible that petrol, the oil companies increased the prices of diesel making it cross the Rs.80 mark.

Between March 16 and June 6, oil companies across the country had frozen the price hikes.

Commenting on unaudited month-end fuel price data released by the Central Energy Fund, the AA pointed out global crude oil prices had "continued to advance, setting the stage for extraordinary fuel price hikes despite rand strength during June".

The government has approved increase in price of petrol by Rs25.58 per liter on Friday.

The new price of kerosene oil (SKO) will be Rs59.06, a rise of Rs23.50 over the existing Rs35.56.

The new prices are usually announced on the last day of a month and usually come into effect after 12am for the upcoming month. Excise duty and taxes amount to 70% of fuel prices, whereas 30% is benchmarked with worldwide prices.

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Diesel may still be cheaper than petrol in other metropolitan cities but prices of both fuels have touched new highs in recent weeks.

The price of high speed diesel has been fixed at Rs101.46 per liter as its price increased by Rs21.31 per liter. But this time the government increased the prices on the recommendation of the Petroleum Division.

In comparison, on Friday, Brent crude, the worldwide benchmark for crude oil prices, was trading at $41.27 a barrel.

However, the government doubled petrol tax from Rs15 as of January to Rs30 now.

Petrol and HSD are two major products that generate most of the revenue for the government due to their massive and yet growing consumption in the country.

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