ISLAMABAD: Pakistan on Wednesday announced increase in prices of all petroleum products. These prices are implemented with effect from September 01, 2022.
The finance division notified the new prices of petroleum products with effect from September 01, 2022.
The price of petrol has been increased by Rs2.07 per liter to Rs235.98 from Rs233.91.
The price of high speed diesel has been increased by Rs2.99 per liter to Rs247.43 from Rs244.44.
The rate of kerosene oil has been raised by Rs10.92 per liter to Rs210.32 from Rs199.40.
The price of light diesel oil has been increased by Rs9.79 per liter to Rs201.54 from Rs191.75.
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.
The sources said that the government was striving to get loans under the Extended Fund Facility (EFF) from the International Monetary Fund (IMF). The government met all the conditions and received $1.16 billion from the IMF after it’s executive board accorded approval on August 29, 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 about $100 dollars. 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 to July 31. 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.