Petrol price may rise by Rs8.98

Govt, however, expected to keep prices unchanged by adjusting petroleum levy

ISLAMABAD:

The price of petrol is expected to go up by Rs8.98 per litre while the price of high-speed diesel (HSD) may rise by Rs1.06 per litre in the upcoming fortnightly revision of petroleum product prices.

However, sources in the Petroleum Division said that the government could keep prices unchanged at current levels for January 16 to 31 by adjusting the rate of petroleum levy.

At present, the government is charging consumers Rs50 per litre in petroleum levy on petrol and Rs32.50 per litre on HSD. However, no general sales tax is collected on the sale of petroleum products which include petrol, HSD, high octane blending component, kerosene oil and light diesel oil.

Apart from the petroleum levy, inland freight equalisation margin has been fixed at Rs3.51 per litre on the sale of petrol and at Rs0.81 per litre on the sale of HSD.

Furthermore, oil marketing margins of Rs5 per litre are collected on the sale of petrol and HSD while the commission of dealers has been set at Rs7 per litre for the two petroleum products.

Exchange rate adjustment for major oil importer Pakistan State Oil (PSO) is estimated at Rs5 per litre on petrol and Rs3.50 per litre on HSD. Over the past 12 days, the rupee has depreciated from Rs225.93 to Rs227.72 per dollar.

According to sources, if the government opts to increase the price of petrol and HSD by Rs8.98 and Rs1.06 per litre respectively, petrol cost will go up from Rs214.80 to Rs223.78 per litre while HSD will cost Rs228.86 per litre compared to the current price of Rs227.80.

Contrary to petrol and HSD, the price of kerosene oil is likely to edge down by Rs3.10 to Rs168.73 per litre and that of light diesel oil by Rs2.39 to Rs166.61 per litre for the second half of January 2023.

Keeping in view the country’s energy demand, about 430,000 tons of mogas (motor gasoline or petrol), 200,000 tons of HSD and 650,000 tons of crude oil are imported every month at a cost of around $1.3 billion.

Published in The Express Tribune, January 14^th, 2023.

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