Petrol to stay dearer despite lower FOB price

KARACHI: The petrol prices on free on board (FOB) basis reflect a Rs20/litre fall for consumers in the next fortnightly rate review, but it is unlikely to go cheaper as the government may pile taxes on this petroleum products along with exchange loss adjustment, The News learnt on Monday.

However, the price of diesel should increase by Re1/litre on FOB basis in the next review. The FOB is the price difference of petroleum prices in the international market and domestic

market. However, the oil industry doesn’t see the reduction in the price of petrol in the next fortnight on the basis of FOB.

According to the industry, the government is likely to further jack up the petroleum levy (PL) on petrol in the next fortnight, while arrears of exchange loss will still be adjusted in the petroleum prices.

“Any reduction in the price of petrol seems unlikely as despite a fall in its price in the global market,” the oil sector people believed. They said the diesel price may see a significant jump in the next fortnight after increasing the PL on it. Its price may also jump further if the government slapped sales tax on its sale, which has been frozen for the last six months.

Oil sector said the government was yet to adjust exchange loss, which was Rs23/litre on petrol and Rs13/litre on diesel. They said that the average international petrol price during the fortnight was $103/barrel, diesel $139/barrel, and crude oil stood at $97/barrel, while average exchange rate was almost Rs217/litre.

They said that consumers were unlikely to benefit from the price reduction in the international market particularly of petrol and there may be a major increase in the price of diesel in next fortnightly review.

According to media reports, the government plans to collect Rs10.5 percent GST and Rs30/litre PL, in addition to other charges like dealers’ and distributors' margins. The government expects to collect Rs60 billion as PL and Rs31 billion as GST per month. The price of petrol is presently Rs233.91/litre, diesel Rs244.44/litre, kerosene oil Rs199.40/litre, and the price of light diesel oil is Rs191.75/litre.