ISLAMABAD: The government on Wednesday increased the petrol and diesel prices by Rs5 per litre each for the second-half of outgoing month.
The government maintained that the decision was made due to surge in international oil prices and also Pakistani rupee devaluation against the US dollar. Similarly, the kerosene and Light Diesel Oil (LDO) were also made dearer by Rs5.46/litre and Rs5.92/litre respectively. The new prices would be effective from September 16 (today) till end of the month.
With the increase in POL prices, the new prices of petrol will be Rs123.30 per litre, diesel Rs120.04 per litre, kerosene Rs92.26 and LDO price would be Rs90.69 per litre. The finance ministry in a statement said that owing to fluctuation in the petroleum prices in the international market and exchange rate variation, the prices of petroleum prices were increased.
In Pakistan, petrol is being used mostly in cars and motorbikes. Diesel is used in the agriculture and transport sectors. Consumers in remote areas use Kerosene for cooking purposes where Liquified Petroleum Gas (LPG) is not available. LDO is being used in industrial sector.
The government is also charging 17 percent general sales tax (GST) on all petroleum products. Apart from this, it is also collecting petroleum levy (PL) on these products, which is directly taken from consumers.
It is to be noted that in August 2018, when the PTI-led government came into power, the Brent oil price was $75.5 a barrel, while the local market price of diesel was Rs112.94 per litre, of petrol Rs95.24 per litre, of kerosene Rs83.96 per litre and of Light Diesel Oil (LDO) Rs75.37per litre.
Now, when the Brent price is almost at the same level, the petroleum products are considerably higher with petrol at Rs123.3 per litre, diesel Rs120.04 per litre, kerosene Rs92.26 per litre and LDO at Rs90.69 per litre.
Independent economists say that the increase in the petroleum products will have a negative impact on the economy by putting upward pressure on Inflation. It will increase power generation cost, goods transportation expenses and ultimately the cost of production.
Especially the limited income households will be hit hard, as it will erode their purchasing power and may now buy less with the fixed amount of earnings.
Another political economist said that inflation has become a ‘politically sensitive’ issue for this government and is a major challenge. For the last several months, the food inflation is in double-digits, pinching everyone hard.
