Every citizen has a question that will Pakistan raise petroleum prices for first fortnight of April 2024 in today’s revision. This question has been emerged after the reports suggested that the government would increase the petroleum prices from April 1, 2024 just ahead of Eid ul Fitr.
Pakistan is set to raise petroleum prices starting from April 1, 2024, sparking concerns among citizens about the potential impact on their finances. This decision comes amidst reports indicating an imminent increase in petrol prices just ahead of Eid ul Fitr.
According to sources, the surge in petrol prices can be attributed to a significant rise in the premium, which is expected to jump from $12.15 per barrel to $13.507 per barrel, representing an escalation of $1.45 per barrel. If the government passes on the full impact of this rise to the general populace before Eid-ul-Fitr, the price of petrol is projected to soar from Rs279.75 to Rs289.75 per liter. Additionally, the Inland Freight Equalization Margin (IFEM) on petrol is anticipated to reach Rs5.01 per liter.
On the contrary, there might be a marginal decline of Rs1.30 per liter in the price of High-Speed Diesel (HSD), as the premium on HSD remains steady at $6.50 per barrel, consistent with the previous two reviews. Projections suggest an IFEM of Rs3.76 per liter on HSD.
Meanwhile, expectations point towards stability in the prices of kerosene oil (KERO) and light diesel oil (LDO), both poised to maintain their current rates at Rs188.66 per liter and Rs168.18 per liter, respectively.
The Oil and Gas Regulatory Authority (OGRA) is scheduled to submit its recommendations regarding petroleum prices on March 31, 2024, with the federal government poised to make an announcement based on OGRA’s counsel.
The anticipated surge in petroleum prices is expected to occur without the proposed imposition of an 18 percent general sales tax (GST). However, if the GST is enacted, consumers could face an additional burden of Rs50 per liter on petrol.
Presently, the government imposes a petroleum levy (PL) of Rs60 per liter, constituting 21.4 percent of the prevailing petrol price of Rs279.75 per liter. Similarly, if the government chooses to impose an 18 percent GST on HSD, consumers could witness a spike of Rs53 per liter from the current rate of Rs285.70 per liter.
Since February 2022, the federal government has maintained a zero GST rate on petroleum products, a policy stance that the International Monetary Fund (IMF) has been pressing to reconsider, advocating for the removal of sales tax exemptions on all items, including petroleum products.
An official from the Federal Board of Revenue (FBR) disclosed that there are currently no deliberations underway to introduce a sales tax on petroleum products. Nevertheless, estimated revenue from an 18 percent sales tax on petroleum products is anticipated to range between Rs21 billion to 25 billion per month, based on current consumption patterns.
As the government prepares to implement these changes, citizens await the final decision with apprehension, mindful of the potential implications for their budgets and daily lives.
