ISLAMABAD: Pakistan has increased the price of petrol for the next fortnight by Rs9.99 ($0.036) to Rs275.60, with effect from today, Tuesday, the finance ministry said in a post on messaging platform X.

The government also increased the price of high speed diesel by Rs6.18 to Rs283.63, the finance ministry said, adding that the new prices were based on “price variations in the international market.”

“There will be no change in the applicable duties/levies, which will remain at the existing level,” the ministry of finance statement said. 

The government has jacked up the maximum limit of petroleum development levy (PDL) to Rs70 per liter in the Finance Bill to collect Rs1.28 trillion in the current fiscal year against Rs960 billion collection during the previous one — almost Rs91 billion higher than the Rs869 billion budget target.

The fortnightly fuel price adjustment came as Pakistan and the International Monetary Fund reached an agreement for a $7 billion, 37-month loan program that comes with tough measures, sending the benchmark share index to a record high on Monday.

Among the reforms the IMF wants Pakistan to take is to maintain power and gas tariffs at levels that ensure cost recovery, with adjustments made to safeguard the financially vulnerable, through existing progressive tariff structures.

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

Inflation averaged close to 30 percent in FY23 and 23.4 percent in FY24, which ended on June 30.