Petrol, diesel prices may surge by over Rs32/litre

ISLAMABAD: Prices of petroleum, oil and lubricants could surge by over Rs32/liter from tomorrow (February 16) mainly on account of the US dollar exchange rate that now stands at Rs271.82.

Though free on board Platt prices have fallen considerably as compared to last fortnight’s pricing. Petroleum, oil and lubricants prices were closed at US dollar/Rs236.40 which stands at at 271.82 for the next fortnight.

According to the official and industrial sources, Mogas price would likely go up 12.8 percent/litre or by Rs32.07 to stand at Rs281.87 from Rs249.8/litre. Similarly, the price of diesel could rise 12.5 percent or by Rs32.84 to stand at Rs295.64 from Rs262.8/litre previously.

Kerosene oil price was forecasted to increase 14.8 percent or by Rs28.05 to stand at Rs217.88/litre, while light diesel oil (LDO) could go up 5.3 percent or by Rs9.90 to stand at Rs196.90 from Rs187/litre set in the last review.

The above prices have been assumed based on the current government taxes and estimated Pakistan State Oil (PSO) incidentals. The government might adjust the exchange rate at over Rs251 with an increase of Rs15/litre for both products of Mogas and diesel. The petroleum levy for diesel that stands at Rs40 could increase by Rs10 to Rs50 from February 16.

The government had earmarked the target to get a revenue of Rs850 billion by imposing a petroleum levy on petroleum, oil and lubricants, but the shortfall in this head has being estimated at Rs250 billion, and the authorities have pinned hopes on getting a revenue of Rs600 billion.

The government had carried out a massive increase of Rs35/litre from February 1, 2023, till February 15.

Currently, the government is charging Rs50/litre petroleum levy, whereas the general sales tax (GST) has not been imposed yet.

The official said that the exchange rate losses to the refineries and OMCs would be done away with in a staggered manner later on as the government right now does not want to pass the full exchange rate on to the consumers.

The last increase in prices of petroleum products was made in the review on January 29, 2021 by the federal government.

Pakistan is currently facing a short supply of petrol, with its most populous province, Punjab bearing the brunt of the crisis, which was being blamed on petroleum dealers.

It has also been alleged that hoarders were holding onto petrol stocks in anticipation of a price hike scheduled on February 15 (today).