ISLAMABAD: Pakistan has revised prices of petroleum products on Monday with effect from August 16, 2022. The finance division issued following new prices that will implement from August 16, 2022:
The price of petrol has been increased by Rs6.72 per liter to Rs233.91 from Rs227.19.
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.
A press release issued by the finance division stated that in the wake of fluctuations in petroleum prices in the international market and exchange rate variation, the government had decided to revise the existing prices of petroleum products to pass on the impact to the consumers.
It is important to note that the government revised the prices in the wake of falling international oil prices and massive recovery in rupee value.
It was believed that the government would reduce the prices of petroleum products considering the latest crude oil prices in the international markets and sharp recovery in local currency against the US dollar.
Some good developments have been seen since the last amendment in prices of petroleum products.
The rupee continued the gain for the seventh straight session after falling to historic low. The local unit witnessed record low at Rs239.94 against the dollar on July 28, 2022. However, since then the rupee is continuously gaining to the dollar. The local currency gained about Rs18.75 or 7.51 per cent during the past seven trading days till August 10, 2022.
Pakistan is a net importer of petroleum products so huge foreign exchange is required for paying against foreign purchases and meeting local demand.
The country has spent a staggering amount of $23.32 billion for the import of petroleum group during fiscal year 2021/2022 as compared with $11.36 billion in preceding year, showing a growth of 105 per cent. The import of finished products recorded an increase of 134 per cent to $12.07 billion during the fiscal year 2021/2022 as compared with $5.16 billion in the preceding fiscal year.
The benchmark Brent crude is below $100 dollars in the international market. Brent crude futures were at $97.40 per barrel in New York trade on August 10, 2022.
The present government had started increasing the petroleum prices on May 26, 2022 when the benchmark Brent Oil was at $112 per barrel.
Considering the price slump of international oil, the government had reduced the prices of petroleum products from July 15, 2022. However experts believed it was a political decision as the government had to increase petroleum levy and apply sales tax.
The previous government of PTI had kept both the petroleum levy and sales tax at zero in order to provide relief to the masses. The PTI government also provided a huge subsidy on prices of petroleum products in order to lower the rates and provide relief to the masses.
However, former Prime Minister Imran Khan was removed through a vote of no-confidence motion on April 10, 2022. Since then the new coalition government led by PML-N increased the prices of petroleum products sharply on three different occasions.
The present government in the budget estimated to collect Rs855 billion as petroleum levy during the fiscal year 2022/2023. As this fiscal year is starting from July 01, 2022, it is likely that the government will opt to impose the levy from this date.