Miftah defends petrol price hike in Pakistan from August 16, 2022

ISLAMABAD: Finance Minister Dr. Miftah Ismail on Tuesday defended the government decision to increase the prices of petrol that are implemented from August 16, 2022

A day earlier, Prime Minister Shehbaz Sharif approved the summary to increase the price of petrol with nominal decline in other petroleum products.

The government announced a significant increase of Rs6.72 per liter in price of petrol to Rs233.91 from Rs227.19 effective from August 16, 2022.

The rate of high speed diesel (HSD) has been nominally reduced by 51 paisas to Rs244.44 from Rs244.95. The price of kerosene oil has been decreased by Rs1.67 to Rs199.40 from Rs201.07. The rate of light diesel oil (LDO) has been nominally enhanced by 43 paisas to Rs191.75 from Rs191.32.

The people of Pakistan were expecting a significant decline in petroleum prices in the wake of sharp decline in international oil prices and massive recovery in rupee value against the dollar during the month of August 2022.

All the quarters have strongly criticized the government for increase price of petrol. The criticism was also came from coalition partners of the present government.

However, Miftah Ismail through Tweet presented a brief explanation on how petrol and diesel prices are set in Pakistan.

Oil and Gas Regulatory Authority (OGRA) takes the average of petroleum prices, adds freight and premium paid by Pakistan State Oil (PSO) on top of these prices, and multiplies that by the exchange rate.

In addition it also “trues up” the previous fortnight’s cost by taking into account the rupees paid by PSO at the actual exchange rate as opposed to the average used to estimate the previous fortnight’s cost.

“We have not added any new tax or levy to the price. The price of petrol has gone up (and diesel has gone down) because the cost paid by PSO in the previous fortnight was more than the cost estimated by OGRA and also because the premium paid by PSO on petrol increased and premium paid on diesel remained unchanged,” Miftah Ismail said.

“Again, not one paisa of new taxes or levies was added,” he repeated.