ISLAMABAD: Pakistan is likely to review petroleum prices on Thursday September 15, 2022 for the next fortnight starting from September 16, 2022.
The country reviews domestic oil prices after every 15 days to adjust rise and fall of prices in the international market and changes occurred in the exchange rates.
READ MORE: New petroleum prices in Pakistan from September 01, 2022
Experts believe that Pakistan may increase the petroleum prices for the fortnight starting from September 16, 2022 because of massive decline in rupee value during past 15 days besides the expected imposition of sales tax and further increase in petroleum levy.
The government on August 31, 2022 decided to increase the prices of petroleum products effective from September 01, 2022. The decision was strongly criticized by the stakeholders because the international markets had seen fall in oil prices.
The finance division notified the new prices of petroleum products with effect from September 01, 2022.
READ MORE: Pakistan to increase petroleum prices 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.
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.
READ MORE: New petroleum prices in Pakistan from August 16, 2022
The benchmark Brent crude is below $100 dollars. Brent crude futures were at $92.84 per barrel in New York trade on September 09, 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.
READ MORE: New petroleum prices in Pakistan from August 1, 2022
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.
The exchange rate has seen massive decline in rupee value during past week despite inflows received from the International Monetary Fund (IMF).
Pakistani Rupee (PKR) has plunged by Rs9.43 against the US dollar since the country received tranche from the International Monetary Fund (IMF). The country received a tranche of $1.16 billion from the IMF under Extended Fund (EFF) loan program on August 31, 2022.
The government was hopeful of improvement in economic indicators once the money is received from the IMF. However, in contrast the PKR fell sharply since the IMF funds transferred to the State Bank of Pakistan (SBP).
The exchange rate was Rs218.75 to the dollar on August 31, 2022, the day when the money was received by Pakistan. However, since then the rupee fell by Rs9.43 or 4.31 per cent to Rs228.18 to the dollar on September 09, 2022 in interbank foreign exchange market.
