Saturday, April 15, 2023
KARACHI: Inflation-weary people should gear up to bear a heavy jolt as the prices of petroleum products are likely to be increased by Rs10-14 per litre for the next fortnight, The News reported on Saturday.
According to industry sources, the government may increase the price of petroleum products attributing to rising oil prices in global markets.
The increase can jump to Rs14 per litre if the government also adjusts the exchange rate losses, unlike the previous review when the authorities didn’t pass on the impact of rupee devaluation to the masses.
According to the working of the country’s oil sector, the ex-depot price of petrol has clocked in at Rs14.77 per litre for the next review of the prices with the exchange rate loss adjustment.
The current ex-depot price of petrol is Rs272 per litre, which may go up to Rs286.77 per litre if the government decides to pass on the impact of global oil prices and exchange rate losses.
Even though the government skips adjusting the exchange losses, the petrol price would still face an increase because of higher global oil prices. The expected raise in the price of petrol is based on the present rate of taxes.
The government is charging an Rs50 per litre levy on petrol with zero general sales tax.
The expected rise in the price of petrol is based on an Rs5 per litre exchange loss adjustment of Pakistan State Oil (PSO), which is due to the government as it didn’t include the exchange rate adjustments in the past to keep the prices of the petrol on the lower side.
The POL prices would have been on the higher side after a massive depreciation of the rupee against the dollar in the last two and half months when under International Monetary Fund (IMF) conditions, the market-based exchange rate was allowed.
On the other hand, the price of high-speed diesel (HSD) is likely to remain unchanged in the next review of prices as the current ex-depot price of HSD is also the same compared to the working for the next fortnightly price of diesel.
The next review of the HSD price and its likely unchanged price is based on the Rs17.50 exchange loss adjustment of PSO, which was also pending when the dollar price shoot up massively in the last several weeks.
“The diesel price may come down by Rs15 per litre if the government doesn’t adjust the exchange rate loss”, sources said.
The government raised the petroleum levy on HSD to Rs50 per litre under IMF conditions in the last review of prices and charging no GST on it.
According to the sources, although working in the oil sector is reflecting a rise in the price of petrol and no change in HSD, it all depends on the government as to what it would decide.
In the present scenario, they added, the government has no option but to raise the price of petrol as its financial space is already squeezed.
Also, the government is making desperate efforts to revive the IMF programme to shore up the forex reserves.