The federal government is likely to raise petrol prices by up to Rs10/litre, effective from April 1, 2024, which could have a serious inflationary impact on the lives of ordinary citizens.
The recent increase in petrol prices is attributed to a rise in the premium from $12.15/barrel to $13.507/barrel, marking a $1.45/barrel increment. If the government passes on the full impact to the general public before Eidul Azha, the price of petrol will exceed that of high-speed diesel, rising from Rs279.75 to Rs289.75/litre. Additionally, the Inland Freight Equalisation Margin on petrol is expected to be Rs5.01/litre.
There might be a slight decrease of Rs1.30/litre in the price of HSD, as the premium on HSD remains at $6.50/barrel, as in the last two reviews of petroleum products. IFEM on HSD is expected to be Rs3.76/litre.
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The prices of kerosene oil and light diesel oil are expected to remain unchanged at Rs188.66/litre and Rs168.18/litre, respectively.
This increase in POL product prices is anticipated to occur without the proposed imposition of an 18% GST. However, if GST is levied, prices could surge by an additional Rs50/litre on petrol. Currently, the government imposes a petroleum levy of Rs60/litre, amounting to 21.4% of the current petrol price.
An FBR official noted that there are currently no proposals under consideration to impose sales tax on POL products. Nevertheless, the estimated revenue from an 18% sales tax on POL products could range between Rs21 billion to 25 billion per month.
Published in The Express Tribune, March 30th, 2024.
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