KARACHI: Inflation-weary people should brace themselves for a severe shock as the prices of petroleum products are likely to increase by Rs 10 to Rs 14 per liter in the next fortnight.
According to industry sources, the government may increase the prices of petroleum products due to the rise in oil prices in the global markets.
The increase could reach Rs 14 per liter if the government also adjusts for exchange rate losses, unlike in the previous review when authorities did not communicate the impact of the rupee’s devaluation to the public.
According to the work of the country’s oil sector, the ex-depot price of petrol is Rs 14.77 per liter for the next price review with exchange rate loss adjustment.
The current ex-depot price of petrol is Rs 272 per liter which could go up to Rs 286.77 per liter if the government decides to pass on the effects of global oil prices and exchange rate losses.
Although the government refrains from adjusting for foreign exchange losses, the rise in global oil prices will still lead to an increase in the price of petrol. The expected hike in petrol price is based on the current rate of taxes.
The government is levying Rs 50 per liter levy on petrol along with zero general sales tax.
The expected hike in petrol prices is based on Pakistan State Oil (PSO)’s adjustment for exchange loss of Rs 5 per litre, which the government says has not included exchange rate adjustments in the past to maintain prices. Gasoline on the bottom.
POL prices would have been on the higher side when market-based exchange rates were allowed under International Monetary Fund (IMF) terms, after the rupee’s sharp depreciation against the dollar in the past two-and-a-half months.
Diesel price likely to remain unchanged
On the other hand, the price of High Speed Diesel (HSD) is likely to remain unchanged in the next price review as the current ex-depot price of HSD is also the same as the next fortnight price of diesel. .
The next review of the HSD price and its likely unchanged price is based on PSO’s exchange loss adjustment of Rs 17.50, which was also pending during the massive rally in the dollar over the past several weeks.
Sources said that if the government does not adjust the exchange rate loss, the price of diesel may fall by Rs 15 per litre.
In the last price review, the government increased the petroleum levy on HSD to Rs 50 per liter under IMF conditions and did not charge any GST on it.
According to sources, although the working in the oil sector is reflecting the increase in petrol price and any change in HSD, it all depends on the government to decide.
He added that in the current situation, the government has no option but to increase the price of petrol as its fiscal space is already squeezed.
Also, the government is making desperate efforts to revive the IMF program to boost foreign exchange reserves.
