KARACHI: Despite a major drop in international prices of diesel and petrol, the government has decided not to cut prices for local consumers to adjust for previous foreign exchange losses and has also increased tax on fuel.
The global market has recorded a significant drop in petrol and diesel prices and the fortnightly average prices of both the products will be taken for the next price revision on February 28, 2023.
According to oil industry sources, the average price of diesel for the next fortnight review fell by $7 per barrel, which translates into a drop of Rs 30 per liter in the local price of diesel in Pakistani rupee terms. The average price of diesel in the global market has come down to around $100 per barrel from $107 per barrel in the last fortnight.
The average price of petrol fell to $90 per barrel for the next price review compared to $93 per barrel in the previous fortnightly price review, bringing down Rs 10 per liter for consumers in the domestic market.
Sources pointed out that the rupee’s appreciation against the dollar in the past two weeks also helped to lower import prices of diesel and petrol, as the average exchange rate fell by Rs 8 for the next price review.
Oil industry sources, however, were not optimistic about a major cut in diesel and petrol prices for domestic consumers as the government was expected to adjust for foreign exchange losses, which it has blamed entirely on oil in previous reviews. was not given to the department.
For example, an exchange loss adjustment of Rs 88 per liter was due on diesel, but the government transferred only Rs 12 per liter on this head, while the rest was still pending adjustment.
“It is likely that the government will approve the adjustment partly because of the accommodation on the exchange rate side,” the sources said.
Similarly, petrol was due an exchange loss adjustment of Rs 34 per liter but the government gave only Rs 12 per liter to the oil industry.
According to sources, the government may increase the petroleum levy (PL) on diesel by Rs 50 per liter under the conditions set by the International Monetary Fund (IMF) as it now has the capacity to do so. . Currently, diesel is Rs 40 per litre.
If the government does not implement GST, diesel prices are expected to drop by Rs 10 per litre, sources said, leaving local consumers to miss out on the drop in diesel prices in the global market.
Official industry sources do not expect any reduction in the price of petrol for local consumers, otherwise it would have come down by Rs 10 as per its price trends in the global market.
