Despite tall claims by the PML-N led coalition government to curb inflation, it has failed to announce reduction in prices of petroleum products, as it was expected, due to fall in global prices.
Insiders claimed on Thursday that the revision in prices of petroleum prices has been delayed as Prime Minister Shehbaz Sharif was in Samarkand, Uzbekistan, to attend the Shanghai Cooperation Organisation’s Heads of State summit meeting.
They said it was prime minister who decided on the prices of petroleum products.
They said that the Ministry of Finance was waiting for the orders of the prime minister regarding the prices of petroleum products.
THE EXPECTATION: Meanwhile, it was expected that the price of petrol would decrease by Rs9.62 per litre to Rs226.36 per litre from Rs235.98 and that of diesel go up for the next fortnight from September 16 (today).
Insiders claimed that the rate of would be raised by Rs3.04 per litre to Rs250.30 from Rs247.26 per litre.
They said average price of petroleum products went down during September 1-15 by Rs9.55 to Rs92.28 from Rs101.83. However, the exchange rate remained on the higher side if compared with the exchange rate registered during August 16-31. And with unchanged customs duty at Rs15.39 per litre, the cost of one-litre petrol in the refinery slid by Rs7.84 per litre to Rs166.76 from Rs174.61 per litre. However, the ex-refinery price of one-litre petrol has been estimated to decrease by Rs9.62 per litre to Rs173.43 from Rs183.04 per litre.
Regarding diesel, though the average Platts price for diesel tumbled during September 1-15 by Rs6.46 per litre to Rs133.93 from Rs140.38 per litre, the cost and freight in dollars went up. Likewise, the exchange rate also remained on the higher side at Rs225.63 against Rs217.81 registered during the August 16-31 period, showing an increase of Rs7.87. However, the likely increase in imposition of customs duty on HSD by Rs3.37 to Rs22.11 per litre from Rs18.74 will increase the cost of one-litre diesel in a refinery by Rs1.57 per litre to Rs224.57 from Rs223 per litre.
And after the PSO exchange adjustment, the ex-refinery price of diesel is estimated to increase by Rs3.04 per litre to Rs231.90 from earlier Rs228.87 per litre. However, for end consumers, the distribution margin for diesel and petrol stands at Rs3.68 per litre and Rs7 per litre. And the imposition of petroleum levy on petrol stands at Rs37.50 per litre and on diesel at Rs7.50 per litre. And Rs4.76 per litre on petrol is being charged in the shape of IFEM (Inland Freight Equalization Margin) and Re0.21 on diesel. The coalition government under the IMF programme is bound to jack up petroleum levy up to Rs50 on both petrol and diesel to generate Rs855 billion in 2022-23.