Petroleum levy on diesel likely to be increased

Dar expected to maintain existing oil prices for the first two weeks of December

ISLAMABAD:

Consumers of diesel are not likely to see any relief from the government as it may decide to increase the rate of the petroleum levy (PL) from December 1, 2022. Finance Minister Ishaq Dar is also expected to maintain the existing oil prices for the first two weeks of December 2022. With the recent increase in PL on petrol and HighOctane Blending Component (HOBC), to the budgeted level of Rs50 per litre, the government now has the space to increase the rate of PL on diesel – a key product, widely used in the transport and agriculture sectors.

This revision, however, will have direct impact on the life of the masses. The current rate of PL on highspeed diesel (HSD) is Rs12.59 per litre. Sources, however, mentioned that diesel prices had witnessed a decline of Rs11.95 per litre during the ongoing fortnight. If the government decides to pass on the reduction, the price of diesel could come down to Rs223.35 per litre from Rs235.3 per litre.

Though the rupee depreciated by Rs Rs1.81 to reach Rs223.62, the price of diesel, kerosene oil and light diesel oil (LDO) witnessed a substantial decline. The fluctuation in oil prices is based on the current rate of PL and GST.

The Inland Freight Equalisation Margin (IFEM) has been taken at Rs6.69 per litre on petrol and Rs1.90 per litre on HSD. The Pakistan State Oil (PSO)’s exchange loss stood at Rs3.01 per litre on petrol and Rs2.10 per litre on HSD.

PSO imports products and therefore, faces exchange losses or gains pinned to the value of the local currency. Likewise, the price of kerosene oil witnessed a decline of Rs9.91 per litre and LDO a decline of Rs13.39 per litre. Kerosene oil is used in the remote areas of Pakistan for cooking purposes where pipeline gas or LPG are not available. It is also used by the Pakistan Army. If the government passes on relief, the price of kerosene oil could come down from Rs191.83 to Rs181.92 per litre and LDO from Rs186.50 to Rs173.11 per litre.

The price of petrol has witnessed an increase of Rs2.62 per litre which could go up to Rs227.42 per litre from the existing level of Rs224.80 per litre.