Rising fuel costs pose serious risk to economy: PBF

The Pakistan Business Forum (PBF) has voiced serious concern over the ongoing rise in petroleum product prices, saying it is placing a heavy burden on households, businesses, and the national economy.

According to the Forum, international Brent crude is currently trading at around 64 dollars per barrel. After adding freight, port handling, and refining costs, the actual price of refined fuel in Pakistan comes to nearly Rs125 to Rs126 per liter. However, despite this lower base cost, consumers are forced to pay more than double at fuel stations.

As per the latest fortnightly notification, the retail price of petrol stands at Rs253.17 per liter, while high-speed diesel is being sold at Rs257.08 per liter. Officials say a major portion of this amount consists of government levies and charges. These include a petroleum development levy of around Rs60 per liter, a climate support levy of Rs2.5 per liter, and customs and other charges ranging from Rs12 to Rs15 per liter. In addition, dealer margins of nearly Rs 8 to Rs9 per liter further raise the final price paid by consumers.

As a result, nearly 40 percent of the fuel price now consists of government taxes and levies. Consequently, this heavy burden directly increases transportation costs, pushes up the prices of goods and services, and adds pressure on electricity and utility bills. Moreover, it reduces household purchasing power and hits farmers, daily wage earners, and small businesses the hardest.

Furthermore, high fuel prices are also damaging agriculture, where diesel is essential for tractors, tube wells, and crop transportation. Rising costs reduce farm profits and contribute to higher food prices nationwide. Meanwhile, businesses face higher operating and logistics costs, which reduces competitiveness and discourages new investment.