The decision comes as the international crude market price is at $67 per barrel, which is almost half of the 2008 highest record of $147 when retail prices stood below Rs80 per litre.
Leader of the Opposition in the National Assembly Shahbaz Sharif termed the price hike as "economic terrorism" and regretted that Prime Minister Imran Khan's government had dropped a "petrol bomb on the public instead of providing them relief" right before Eidul Fitr.
"Imran Niazi's 'Naya Pakistan' has taken this country on the cusp of economic crisis," he said.
PPP Vice President Sherry Rehman, in a statement on Saturday, condemned the move and said: "The failed government has given nothing [to the country] except inflation and unemployment in the past nine months. The revolutionary administration has increased oil prices by Rs20 within nine months."
She pointed out that petroleum prices had decreased by 3 per cent globally yet the government had announced an increase.
Noting that the rise comes days before the budget, she asked if the step was taken on the directions of the International Monetary Fund.
DAWN quoted an official as saying that the crude price had dropped by 7 per cent in the Arabian Gulf Market — the source of Pakistani imports — over the last month from $72 on April 28 to $67 per barrel on May 29. But he claimed that the currency devaluation caused the major negative impact.”
This explanation came as the government on Friday, despite a reduction in international crude price, increased the prices of petroleum products.
Based on import parity price of Pakistan State Oil (PSO) for purchases in May, the government approved Rs4.50 per litre increase in the price of high speed diesel (HSD), Rs4.26 in petrol, Rs1.69 in kerosene and Rs1.68 for the price of light diesel oil (LDO).
As such the ex-depot rate of HSD has been increased from Rs122.32 to Rs126.82 per litre, indicating an increase of 3.67 per cent. Likewise, the ex-depot petrol price has been increased from Rs108.42 to Rs112.68 per litre, up 3.92 per cent.
The price of kerosene oil has been enhanced from Rs96.77 to Rs98.46 per litre, showing a rise of 1.74 per cent. The new ex-depot price of LDO has been fixed at Rs86.94 per litre, which was previously Rs88.62 per litre, showing an increase of 1.93 per cent.
To make price adjustments, the GST rate has been set at 13 per cent for both petrol and HSD and 17 per cent for LDO and kerosene. Until January, the GST on LDO and kerosene was 0.5 per cent and 2 per cent, respectively. The GST on petrol and HSD was 8 per cent and 13 per cent, respectively.
Besides, the government has more than doubled the rate of petroleum levy on HSD in recent months. It was raised from Rs8 to Rs18 per litre. Similarly, the levy on petrol has also been increased (by 40 per cent) from Rs10 to Rs14per litre. The petroleum levy on kerosene oil and LDO remains unchanged at Rs6 and Rs3 per litre, respectively.
Over the past two months, the government has started increasing petroleum levy rates to partially recoup a major revenue shortfall faced by the Federal Board of Revenue.