There is no likelihood of a relief for Pakistanis as the government cannot reduce petroleum prices due to pressure from the International Monetary Fund (IMF) for the next fortnight.
According to people in the oil industry and government sector, international prices of crude did not leave room for the government to reduce prices.
The people said ex-refinery prices of diesel and petrol were showing a nominal reduction for the next fortnight; however, it could not be adjusted to lower the prices of petroleum products as the government has yet to adjust the exchange losses, which have been lingering on for quite some time.
In the last fortnightly review, the government kept the prices of petroleum products unchanged by not adjusting the exchange loss, which was likely to be adjusted in the next review, they believed.
With the need to adjust the exchange loss along with the IMF demand to generate additional revenue by raising the petroleum levy on diesel, the government was not in a position to reduce the prices of petroleum products for end consumers.
At present, the government is charging a Rs50 petroleum levy on petrol and Rs12 on diesel, whereas under the accord with the IMF, it has to jack up the levy on diesel to collect the additional revenue.
The people pointed out that if the government adjusted the exchange loss and raised the petroleum levy on diesel to Rs50 as per IMF conditions, the price of diesel might go up manifold.
However, they added, it was likely that the rate of petroleum levy might see some jump along with an adjustment in exchange losses, which might raise the price of diesel as well as the retail price of petrol in the next fortnightly review of fuel prices.
They said that the government has been withholding the imposition of general sales tax (GST) to avoid a massive increase in the prices of petroleum products; however, the IMF was pressing the country to go for its imposition.
The people said that GST could be imposed on petrol as petroleum levy on it has already touched the highest level.