ISLAMABAD: Anticipated adjustments in international prices, import premiums, and exchange rates are likely to result in an increase of Rs1-4 per litre for petrol and high-speed diesel (HSD) on Thursday (February 29) for the upcoming fortnight.
Sources familiar with the matter indicate that minor fluctuations, ranging from 10 to 50 cents per barrel, were observed in the prices of petrol and HSD in the international market over the past two weeks. Additionally, the Pakistan State Oil (PSO) faced higher import premiums for petrol.
Consequently, petrol prices are projected to rise by Rs3-4 per litre, while HSD prices may increase by Rs1-1.5 per litre, depending on the final exchange rate calculations. The US dollar depreciated by approximately 15 paise against the rupee on February 28. It’s expected that the prices of kerosene and light diesel oil will remain unchanged.
For pricing calculations, officials report that the price of petrol increased by about $0.5 per barrel to $90.78, while the price of HSD decreased by eight cents per barrel to $101.05. Meanwhile, the rupee remained relatively stable. Import premiums paid by PSO for petrol rose slightly to $10.45 per barrel from $9.47 per barrel, while it remained unchanged for HSD at $6.5 per barrel.
The government has already reached the maximum permissible limit of Rs60 per litre in petroleum levy on both petrol and HSD. As per commitments with the International Monetary Fund, the government aims to collect Rs869 billion as petroleum levy during the current fiscal year. However, it has already collected about Rs475 billion in the first half (July-December) of the fiscal year.
Fuel prices have been significant contributors to the high inflation rate, which reached 27.5% in January, as measured by the consumer price index. Petrol, predominantly used in private transport, rickshaws, and two-wheelers, directly impacts the budgets of the middle- and lower-middle class. Meanwhile, HSD, primarily used in heavy transport vehicles, trains, and agricultural engines, notably affects the prices of essential commodities such as vegetables.
Presently, the government imposes approximately Rs82 per litre tax on both petrol and HSD. Although the general sales tax (GST) is zero on petroleum products, the government levies Rs60 per litre petroleum development levy (PDL) on both. Additionally, Rs50 per litre is charged on high octane blending component and 95RON petrol, with customs duties ranging from Rs17-20 per litre on petrol and HSD. Petrol and HSD contribute significantly to government revenues, with monthly sales ranging from 700,000 to 800,000 tonnes compared to just 10,000 tonnes of monthly demand for kerosene.
Story by Khaleeq Kiani
