The petroleum levy on petrol has been raised by Rs 17.50 to Rs 37.50 per litre from September 1 after which the price of petrol has gone up from Rs 233.91 to Rs 235.98 per litre.
The fluctuation in the global oil market continuous due to Russia Ukraine war and increased inflation, however, we have seen a decline in the oil prices as Organization of the Petroleum Exporting Countries (OPEC) Increased the oil production.
However, despite a decrease in the oil prices, the Pakistan government raised the petroleum prices for the next fortnight. As per government justification, the increase is due to the increase in petroleum levy which is imposed to meet International Monetary Fund (IMF) conditions and the exchange rate fluctuation.
As per notification released by the finance division, there is Rs 2.07 increase in the petrol price and now stands at Rs 235.98 per litre, the high-speed diesel (HSD) saw an increase of Rs 2.99 and HSD’s new price is now Rs 247.43 per litre, The light diesel oil (LDO) price increased by Rs 9.79 and LDO’s new price is Rs 201.54 per litre. Lastly, with an increase of Rs 10.92, the Kerosene will now be available at Rs 210.32. these prices will be effective for the Sept 1-15 period.
As per finance ministry statement “during the fortnightly review of petroleum products prices, the government is partially increasing the petroleum prices in parallel to the international oil prices and fluctuation in exchange rate. In order to provide maximum relief to the citizens, the government have imposed minimum petroleum levy.
The new ex-depot prices for the Sept 1-15 period are: petrol at Rs 235.98, HSD at Rs 247.43, kerosene at Rs 210.32, and LDO at Rs 201.54 per litre.
Previously, from August 16, the petroleum rate was also increased except HSD and Kerosene. Petrol price was increase by Rs 6.72 per litre, meanwhile, a meager 43 paisa was increased on LDO. On the other hand, the HSD price was reduced by 51 paisa and kerosene price was reduced by Rs 1.67 per litre.
We are seeing the gradual increase in the petrol prices by this government in order to meet the IMF conditions of imposing petroleum levy in order to resume the bailout package. Meanwhile, the positive development has been observed as IMF board meeting was held on 29 August and board reinstated the IMF programme.
From May 26 to July 1, the petrol price rose by 66%, kerosene 95%, HSD 92% and LDO by 90%.
The withdrawal of the subsidies in the power and oil sectors was the one of the main condition IMF set in order to lower the fiscal deficit, which resulted in the petroleum price hike.
At the moment, Pakistan still needs to meet the PDL on petroleum products to a maximum of Rs 50 per litre, which will assist government to gather Rs 855 billion during current fiscal year. At present, the government is charging maximum PDL on oil is from Rs 15 to Rs 25 per litre on different products. Meanwhile, govt also charging customs duty of Rs 20 per litre on both petrol and HSD.