ISLAMABAD: The government raised prices of all petroleum products for the next fortnight despite a decline in global oil rates, mainly because of the exchange rate fluctuation and an increase in the petroleum levy in line with commitment with the International Monetary Fund (IMF).
According to a late-night notification issued by the finance ministry, the per-litre price of petrol has been increased by Rs2.07, high-speed diesel (HSD) by Rs2.99, kerosene by Rs10.92, and that of light diesel oil (LDO) by Rs9.79.
“In the fortnightly review of petroleum products’ prices, the government has considered the recommendation to make partial increase in the prices of petroleum products in line with change in the international oil prices and fluctuation in the exchange rate,” the ministry said, adding that “petroleum levy has been kept at minimum in order to provide relief to the consumers”.
The new ex-depot prices for the Sept 1-15 period are: petrol at Rs2.35.98, HSD at Rs247.43, kerosene at Rs210.32, and LDO at Rs201.54 per litre.
In the previous fuel price announcement on Aug 16, the government raised the rates of petrol and LDO but reduced those of HSD and kerosene.
The rate of petrol was increased by Rs6.72 and that of LDO by 43 paise per litre, whereas the prices of HSD and kerosene were cut by 51 paise and Rs1.67 per litre, respectively.
On July 14, Prime Minister Shehbaz Sharif announced a reduction of Rs18 to 40 per litre in fuel prices after global rates went down. That was the first time the coalition government reduced petroleum prices after it came to power in the second week of April.
The government started raising fuel prices from the last week of May to fulfil IMF conditions for resuming a bailout package.
Between May 26 and July 1, the petrol price rose by 66pc (or Rs99 per litre), HSD by 92pc (Rs132.39), kerosene by 95pc, LDO by 80pc (Rs100.59).
The price hike has been the main issue between Pakistan and the IMF as part of an agreement to withdraw subsidies in oil and power sectors to reduce the fiscal deficit.
Ousted prime minister Imran Khan had given the subsidy in his last days in power to cool down public sentiments in the face of double-digit inflation, a move the IMF said deviated from the terms of the 2019 deal.
The petroleum development levy (PDL) came to an end on March 1 price revision as international prices went up and the PTI government decided to not only reduce petroleum prices by Rs10 per litre but freeze it for the next four months, i.e. until the end of June.
Under the IMF deal, the government has to gradually increase the PDL on oil products to a maximum of Rs50 per litre to collect Rs855bn during the current fiscal year.
At present, GST is zero on all four fuel products against the normal tax rate of 17pc. However, the government is currently charging a PDL of Rs15 to Rs25 per litre on various products. It is also charging a customs duty of about Rs20 per litre on petrol and HSD.
Published in Dawn, September 1st, 2022