The PTI-led government on Tuesday dropped petrol bomb on the Pakistani nation by increasing the price of petrol by Rs12.03 per litre due to an increase in the prices of crude oil in the global market.
“The prices of petroleum products are showing a drastic increase in the international market and presently are at the highest level since 2014. Despite the unabated increase since the beginning of the year, Prime Minister Imran Khan deferred the last review of petroleum products’ prices on January 31, 2022, and advised against the summary of OGRA,” said a finance division statement.
These are the highest prices of all the products and also the highest increase in their prices in one go.
The Ministry of Finance announced the decision after Prime Minister Imran Khan agreed to raise levy on all petroleum products by Rs4 per litre to honour commitment made to the IMF for smooth continuation of ongoing Extended Fund Facility (EFF). However, GST rate on all these products was kept unchanged at zero.
The finance division said that the “relief” had led the government to bear a revenue loss of around Rs 35 billion in the fortnight.
“In the fortnightly review of petroleum products’ prices, the prime minister has considered the recommendation to increase the prices of petroleum products in line with a change in the international oil prices. Despite the increase in the prices of petroleum products, petroleum levy and sales tax have been kept to the minimum,” said the notification.
The hike in petrol prices was expected as Information Minister Fawad Chaudhry had told the media that “there is no doubt that the price of petroleum products would increase further.”
The minister had confirmed the hike in a press conference after the cabinet meeting.
According to a notification issued by the Ministry of Finance, the ex-depot price of petrol was fixed at Rs159.86 from Rs147.83 per litre at present, up by Rs12.03 per litre or 8.14 percent. The petroleum levy on petrol was increased from Rs13.92 to Rs17.92 per litre. The government is also charging about Rs12 per litre on petrol as customs duty.
The ex-depot price of high-speed diesel (HSD) was raised from Rs144.62 to Rs154.15 per litre, showing an increase of Rs9.53 per litre or 6.6 percent. The petroleum levy on HSD was increased from Rs9.30 to Rs13.30 per litre in addition to Rs12 per liter customs duty.
The ex-depot price of kerosene oil was also increased from Rs116.48 to Rs126.56 per litre, up by Rs10.08 or 8.65 percent. The petroleum levy on kerosene was increased from Re1 to Rs5pc per litre.
The ex-depot price of light-diesel oil (LDO) was also jacked up from Rs114.54 to Rs123.97, up by Rs9.43 or 8.23 percent. The petroleum levy on LDO was raised from Rs5.50 to Rs9.50 per litre.
All jet fuel prices were also increased. The price of JP-1 was raised by Rs11 per litre to Rs140.65 while JP-8 price was increased by Rs7 per litre to Rs135.72. The E-10 fuel (ethanol petrol) was also increased by over Rs10 per litre to Rs157.35. These three products also contain 17pc GST but no PL.
While announcing the price hike, the finance ministry said the prices of petroleum products were showing drastic increase in the international market and were at the highest level since 2014.
Interestingly, the domestic prices of petrol and HSD in 2014 hovered between Rs110 and Rs120 per litre.
It said the prime minister had deferred price review on January 31 and provided relief to consumers through reduced GST and OL and was bearing about Rs35bn fortnightly revenue loss.
At present, the GST is zero on all the key products, including petrol, HSD, kerosene and LDO against 17 percent normal GST. The government is charging petroleum levy of Rs17.92 per liter on petrol, Rs13.30 on HSD, Rs9.50 on LDO, Rs5 on kerosene and Rs30 per litre on high octane blending component. The government is also charging about Rs12 per litre customs duty on petrol and HSD.
FINANCE MINISTER: Earlier,Finance Minister Shaukat Tarin had indicated an increase in petroleum prices while appearing in a private TV channel show.
When the host asked him that the government would lower petroleum product prices artificially, Tarin categorically rejected the idea.
“If the international market witnesses a hike in prices, the government will have to shift this burden onto the people,” he added.
He hesitated to back the government’s decision to maintain unchanged petroleum prices for the first 15 days of February, saying that though this decision is popular, it is not going to sustain for a longer period.