The cash-strapped Pakistan government is set to hike the prices of petroleum products by Rs 10-14 per litre during the next fortnight, further burdening the people who are hit by skyrocketing inflation, a media report said on Saturday.
The federal government may increase the price of petroleum products attributing to rising oil prices in global markets, The News International quoted the industry sources as saying.
The increase can jump up to Rs 14 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 Rs 14.77 per litre for the next review of the prices with the exchange rate loss adjustment.
The current ex-depot price of petrol is Rs 272 per litre, which may go up to Rs 286.77 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 rise in the price of petrol is based on the present rate of taxes.
The government charges a Rs 50 per litre levy on petrol with zero general sales tax. The expected rise in the price of petrol is based on a Rs 5 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 Pakistan Oilfields Limited 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) will likely 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 Rs 17.50 exchange loss adjustment of PSO, which was also pending when the dollar price shot up massively in the last several weeks. “The diesel price may come down by Rs 15 per litre if the government doesn’t adjust the exchange rate loss," the newspaper quoted sources as saying.
The government raised the petroleum levy on HSD to Rs 50 per litre under IMF conditions in the last review of prices and charged 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, adding the government is making desperate efforts to revive the IMF programme to shore up the forex reserves, according to the News report.
