Pakistan may unveil major changes in petroleum prices on March 31

ISLAMABAD: Pakistan may unveil major changes in petroleum prices on March 31, 2023 for next fortnight effective from April 01, 2023.

The country will announce the prices of petroleum products as per schedule for fortnight starting from April 01 to April 15.

People are expecting from the government a huge relief in fuel prices due to significant decline in global oil prices. Besides, Prime Minister Shehbaz Sharif himself already approved a plan to reduce the prices of petroleum products for lower income group.

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The international markets have seen steep decline in oil prices due to lower demand in the wake of easing economic growth globally.

Benchmark Brent crude oil recorded around 36 per cent decline during past one year from $117 per barrel to the present level of $75 per barrel.

Meanwhile, Prime Minister Shehbaz Sharif also approved a policy to provide relief to the lower income group by providing petrol to motorcyclists, small car owners and three-wheeler at reduced rate.

Recently, Prime Minister Shehbaz Sharif announced petroleum package to provide subsidy of Rs50 per liter to provide relief to people having motorcycles, rickshaws and lower capacity engines.

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The relief package for subsidy is liable on those consumers who have motorcycles, rickshaws, 800 cc or smaller cars.

Minister of State for Petroleum Musadik Malik briefed about the strategy for providing petroleum subsidy to the low-income segment of society.

Prime Minister Shehbaz Sharif announced the relief package in the review meeting. He said that the program of petroleum subsidy would be started soon and a comprehensive strategy would be formed with the cooperation of relevant departments for effective implementation of the subsidy program.

However, in order to materialize the plan for reduced oil prices for certain segment of the society the government need to create resources besides satisfying the International Monetary Fund (IMF) for creating additional space for the relief.

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On the other hand, the rupee after touching all-time high of Rs285.09 to the dollar on March 02, 2023 is still hovering around this level. Therefore, the government has opportunity to pass on the benefit of falling international oil prices to the masses.

The country is net importer of petroleum products to meet local demand.

Oil import bill fell to $11.88 billion in first eight months (July – February) of fiscal year 2022/2023, according to data released by Pakistan Bureau of Statistics (PBS).

The petroleum import bill of the country recorded a decline of 8.28 per cent to $11.88 billion during eight months of the current fiscal year as compared with $12.95 billion in the corresponding months of the last fiscal year.

However, on the flip side the massive depreciation in Pakistan Rupee (PKR) resulted in the import bill by 23 per cent. In rupee term, the petroleum bill increased to PKR 2.72 trillion during first eight months of the current fiscal year as compared with PKR 2.21 trillion in the same months of the last fiscal year.

In the petroleum group, the import of petroleum products registered a decline of 14.47 per cent to $5.35 billion during July – February 2022-2023 when compared with $6.26 billion in the same period of the last fiscal year.

READ MORE: Pakistan’s current account deficit narrows by 313% in 8MFY23

Meanwhile, import of petroleum crude recorded an increase of 10.32 per cent to $3.48 billion during first eight months of the current fiscal year as compared with $3.16 billion in the corresponding months of the last fiscal year.

The country is facing economic crisis like situation and negotiation a bailout package with the IMF, which was stalled for the past many months.

The government has also presented mini budget for generating additional as demanded by the IMF. Which may also include imposition of sales tax on petroleum products.

Now the local authorities are hoping to finalize staff level agreement with the IMF for enabling the release of tranche to the tune of $1.2 billion.

Previously petroleum prices in Pakistan had been increased which were effective from Thursday March 16, 2023.

A statement issued by the Finance Division, stated that in the last fortnight, Platts Singapore prices registered an increase.

This along with a depreciation of Pakistani Rupee (PKR) has resulted in an increase of petroleum products in Pakistan.

Accordingly, the price of MS (Petrol) has increased by Rs5 per liter and price of High Speed Diesel (HSD) has increased by Rs13 per liter.

The increase in price of kerosene oil has been kept at Rs2.56 by reducing government dues on it. Similarly, price of light diesel oil has been kept constant by adjusting government dues as well.

The new prices will be effective from Marcy 16, 2023 as follow: