Fuel prices: Govt absorbed revenue losses to protect consumers

ISLAMABAD: Prices of fuel in the international market surged significantly but the government did not raise these prices proportionally in the domestic market in a bid to protect consumers from further inflationary pressures.

Official documents and charts made available to The News show that prices of petroleum products (POL) in Pakistan are lower compared to other countries in the region and in some cases, certain developed economies. POL prices stood at $0.708 per liter in Pakistan, while it was $0.737 per liter in Indonesia, $0.817 per liter in Sri Lanka, $0.865 per liter in Turkey, $0.866 per liter in the United States, $0.927 per liter in Bhutan, $1.054 per liter in Bangladesh, $1.110 per liter in China and $1.255 per liter in India on May 6, 2021.

The government slashed its revenues through petroleum levy in order to benefit consumers.

Data from the World Bank data prices of POL, metal and food witnessed a surge but the government took steps to ensure prices remain affordable. However, per capita income in all comparable regional economies, and especially in those in the developed world, was much higher.

In Pakistan, per capita income declined in the wake of the COVID-19 pandemic last year, when the economy contracted to negative 0.38 percent. POL prices were rising in the international market and were over $80 per barrel in February 2019. Then, the prices nosedived to $25-30 per barrel in April 2020. Since then, POL prices have been rising again, surged up to $80 in February 2021. The prices of metals were over $80 in the international market, then fell to $70, but again rebounded in April 2020. Currently, prices stand at $100 for various metal products.