Wednesday, May 25, 2022

Petrol prices may soon climb by Rs10 per litre

Prices of all major petroleum products are expected to rise by Rs8 to Rs10 on Monday due to increasing international oil prices, new fuel levies, and currency devaluation.

In the last two weeks, the worldwide benchmark crude price has risen from $95 to $99 a barrel, despite a slight depreciation in the exchange rate.

According to reputable sources, the price of fuel (motor gasoline) and high-speed diesel (HSD) is projected to rise by around Rs5.60 and Rs4.50 per litre, respectively. Prices of kerosene and light diesel oil (LDO) are also expected to rise in the coming months, by around Rs4 and Rs3.70 per litre, respectively.

Earlier on February 15, the government increased petroleum charge on all petroleum goods by Rs4 per litre as per IMF pledge, although sales tax rates were decreased to nil on all products to curb inflation.

If the government decides to keep increasing the petroleum levy by Rs4 per litre monthly, the increase in ex-depot petrol price is predicted at Rs9.60, followed by Rs8.50 for HSD.

The prime minister may wish to delay a new fuel tax hike, but his economic staff wants to stay on track with the international pricing trend and all existing levies, according to an official.

The government slashed GST on important products from 17% in January to zero earlier this month, including fuel, HSD, kerosene, and LDO.

The government has been increasing the petroleum duty by Rs4 on the first of every month, except this month, to meet the IMF’s target of Rs30 per litre. It currently charges Rs17.92 per litre for fuel, Rs13.30 for high octane blend component (HOBC) and R9.50 for LDO.

Read more: Shehbaz Sharif to be Prime Minister of Pakistan if no-trust motion succeeds

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