Pakistan unlikely jack up petroleum prices from March 01

Pakistan unlikely jack up petroleum prices from March 01

KARACHI: Pakistan is unlikely to jack up petroleum prices from March 01, 2023 for next 15 days as the government already made sharp increase on the basis of rupee depreciation.

However, any announcement to apply sales tax may increase the petroleum prices for the period mentioned above.

On the other hand, sources said that due to recent sharp appreciation in rupee value during past couple of weeks the government may not further increase the petroleum prices.

Further latest inflation record high readings may compel the government to avoid take any harsh decision.

READ MORE: Headline inflation to surge by over 30 pc in February 2023

Pakistan is set to announce new prices of petroleum products on February 28, 2023 for next fortnight amid rupee appreciation and sales tax rate hike.

The new prices will be effective from March 01, 2023 and will remain applicable till March 15, 2023.

The government will consider recent appreciation in the rupee value against the dollar. The local currency recorded a historic low of Rs276.58 to the dollar on February 03, 2023. However, after touching the lowest level the local currency recovered 6 per cent or Rs16.59 to the dollar till the end of market on February 24, 2023.

READ MORE: Mini budget applies as President Alvi signs Finance Supplementary Bill 2023

In a statement on February 15, 2023, the finance division said that increase in price was due to Pakistani Rupee (PKR) devaluation applicable for the calculation of current pricing period.

Previously the government enhanced up to Rs35 per liter on January 29, 2023.

On the other hand, the importance of the scheduled announcement is that the country has already massively increased the petroleum prices during past two announcements and yet it has not applied sales tax.

The normal rate of sales tax has been enhanced to 18 per cent from 17 per cent in the mini-budget, which was announced on February 15, 2023.

The petroleum prices in Pakistan as of February 16, 2023, which will be applicable till February 28, 2023, are:

READ MORE: Experts question sales tax rate increase without Parliament approval

PetrolRs272 per liter
High Speed DieselRs280 per liter
Kerosene OilRs202.73 per liter
Light Speed Diesel OilRs196.68 per liter

The finance division on February 15, 2023 notified the new rates for next fortnight, as applicable from February 16, 2023:

Petrol rate has been increased by Rs22.20 to Rs272 per liter from Rs249.80

High Speed Diesel (HSD) rate has been increased by Rs17.20 per liter to Rs280 per liter from Rs262.80.

The rate of Kerosene oil has been enhanced by Rs12.90 to Rs202.73 per liter from Rs189.83.

The price of light diesel oil (LDO) has been increased by Rs9.68 to Rs196.68 from Rs187.

The government increased the prices up to Rs22.20 per liter in petroleum products.

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

READ MORE: Salient features of mini budget or Finance Supplementary Bill 2023

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.

Experts believed that a storm of price hike is inevitable after the changes made by the government to comply with the IMF conditions.