Consumers may be denied petrol price relief

Govt likely to raise petroleum levy to boost revenue collection

ISLAMABAD:

The government is likely to deny consumers a full relief from the decline in international oil prices as it could further hike the petroleum levy to collect more revenue.

The new petroleum product prices will come into effect on July 16, 2023.

According to sources, the government is currently charging Rs55 in petroleum levy on a litre of petrol and it is expected to raise it to Rs60 per litre, which will be the highest in the country’s history.

According to price calculations made for the upcoming fortnight, the cost of petrol has gone down by Rs10.08 per litre primarily due to rupee stability in the wake of a new loan approval by the International Monetary Fund.

As a result, Pakistani consumers should enjoy a reduction of Rs10.08 per litre in the price of petrol, which is used mostly in motorbikes and cars and is an alternative to compressed natural gas.

Pakistan, particularly the province of Punjab, is facing a dearth of CNG, therefore, the demand for petrol will stay high. However, unchecked smuggling of Iranian petrol has dented consumer demand for petroleum products produced by refineries in Pakistan.

The price of high-speed diesel is expected to
be increased by Rs3.66
per litre for the second half of July. Such fluctuations pose challenges to both consumers and industries alike.

According to Petroleum Division sources, the price of kerosene oil is likely to rise by Rs0.73 per litre and that of light diesel oil (LDO) by Rs1.43 per litre.

If given the green light, the decrease in petrol price will take its ex-depot rate to Rs251.92 per litre compared to the current market rate of Rs262.

However, the ex-depot price of diesel could soar to Rs264.16 per litre, from the existing market rate of Rs260.50.

High-speed diesel is mainly used in transport and agriculture sectors. Therefore, any increase in its price will have a direct inflationary impact on the lives of people.

Similarly, the price of kerosene oil may be raised by Rs0.73 to Rs171.78 per litre at ex-depot stage. LDO may see an increase of Rs1.43, which will push its ex-depot price to Rs155.65 per litre.

These price adjustments could adversely affect households and industries relying on kerosene oil for cooking and LDO for various industrial processes.

Published in The Express Tribune, July 15^th, 2023.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.