ISLAMABAD: Prices of major petroleum products are expected to rise by Rs 6.30 per liter on January 15 for the next fortnight, mainly due to higher international oil prices.
Informed sources said petrol (motor gasoline) and high-speed diesel (HSD) prices have been hiked by Rs 5.30 and Rs 5.80 per liter, respectively, based on the prevailing tax rates, import parity price. and exchange rate.
Similarly, kerosene and light diesel oil (LDO) prices are also expected to increase by Rs 5.80 and Rs 6.30 per liter, respectively.
An official said the government could slightly reduce sales tax on petroleum products if it decides to ease inflationary pressures on the public, but that will largely be the International Monetary Fund’s (IMF) revival program for $6 billion. (IMF) will depend on its affiliation.
Growth driven primarily by higher international rates
In recent months, the government has been increasing the petroleum levy and general sales tax (GST) on an alternate fortnightly basis as part of its negotiations with the IMF. The levy will continue to rise by Rs 4 on the 1st of every month till it reaches a maximum of Rs 30 per liter and there will be a GST adjustment on the 15th of every month based on the price cushion.
At present, the government has been charging about Rs 35 per liter on petrol and about Rs 30.50 per liter on HSD.
The tax on one liter of petrol includes petroleum levy of Rs 17.13, GST of Rs 7.31 (5.45 pc) and customs duty of Rs 10. The HSD price per liter includes petroleum levy of Rs 17.62, GST of Rs 3.53 (2.5 pc) and customs duty of Rs 9.26.
The ex-depot price of petrol – final cost after levying sales tax – is currently Rs 144.82 per liter and HSD Rs 141.62.
Petrol is used mostly in personal transport, small vehicles, rickshaws and two-wheelers and has a direct impact on the budget of the middle and lower-middle class, while the price of HSD is considered highly inflationary as it is mostly used in heavy transport vehicles. , is done in trains. and agricultural engines such as trucks, buses, tractors, tubewells and threshers.
At present, the ex-depot price of LDO is Rs 111.06 per liter and that of kerosene is Rs 113.53 per litre.
LDO is consumed by flour mills and some power plants, while kerosene is mostly used by unscrupulous elements to mix it with petrol and for lighting some remote areas of the country.
Till last year, the government used to levy petroleum levy of Rs 30 per liter on HSD and petrol and Rs 6-8 per liter on kerosene and light diesel.
Petrol and HSD are the two major products that generate most of the revenue for the government in the country due to their huge and yet rising consumption.
Petrol sales are touching an average of 750,000 tonnes per month against a monthly consumption of about 800,000 tonnes of HSD. Monthly sales of kerosene and LDO are generally between 11,000 and less than 2000 tonnes.
Under the new mechanism, the government now sets oil prices to pass on the effect of international prices published in Standard & Poor’s energy publication Platts Oilgram, instead of the previous mechanism of monthly calculations based on the import cost of Pakistan State Oil.
Published in Dawn, January 14, 2022