KARACHI: In line with the government’s aim to appease the International Monetary Fund (IMF), petroleum prices are expected to rise in the upcoming fortnightly review by the finance ministry.
It should be noted that the sharp fall in the value of the rupee against the US dollar in the last two days will not be reflected much in the review on January 31 (Tuesday) as the average exchange rate will reach Rs 240, this information is collected from across the country. have been done. The oil sector showed.
However, it is learned that the fortnightly review on February 15 will reflect a significant increase in domestic petroleum prices due to the depreciation of the rupee.
“The appreciation of the dollar against the rupee in the last two sessions will be reflected in the revision of petroleum prices on February 15, when the dollar price calculation will start at Rs 260,” oil industry insiders said. People familiar with the industry said.
In next week’s fortnightly review, diesel and petrol prices will see a sharp rise due to free on board (FOB) prices.
Sources familiar with the matter said that if calculated on FOB, there is a possibility of an increase in the price of diesel by Rs 25.
“There will be some increase in the exchange rate, but not that much,” he said, attributing the increase to FOB as the price of diesel in the international market reached $117 per barrel as against $114 per barrel. went
If the government raises the Petroleum Levy (PL) on diesel to Rs 50 per litre, which is likely to meet the IMF’s condition, the price may rise further and the inclusion of General Sales Tax (GST) at 10 per cent. Will push the price up a lot. High, he added.
Meanwhile, petrol prices are likely to increase by Rs 20 to Rs 21 on FOB basis. The government is charging Rs 50 per liter PL on petrol and slapping 10% GST will also cost consumers in the upcoming fortnightly price review.
The price of petrol in the international market touched $97 per barrel as against $93 per barrel at the time of review last fortnight.
Oil industry players believe that the government is likely to increase the PL on diesel to meet IMF conditions, otherwise it would not have allowed free float of the exchange rate.
The government’s decision to lift the cap on exchange rate parity led to a sharp appreciation of the dollar against the local unit in two consecutive sessions on Thursday and Friday.
The rupee fell to a new low against the US dollar on Friday, closing at Rs 262.60, down 2.73 per cent on the day. It has also sounded the alarm about a new wave of inflation in the country.
However, oil industry sources admitted that while the government was hesitant to hike GST on petroleum prices, which would cost it politically, the next fortnight’s review of petroleum Prices were set to rise.
He added that the price hike may become more stringent in the next fortnightly review on February 15.
