Petrol price jumps to Rs137.79 after Rs 10.49 per litre increase

Petrol prices increasing across the globe, says Tarin as price hits record high in Pakistan

ISLAMABAD: The federal government on Saturday raised the price of petrol by Rs10.49 per litre and that of high speed diesel (HSD) by Rs12.44 per litre with immediate effect ostensibly to pass on the impact of higher international market.

According to a notification issued by the Finance Ministry, the new price of petrol, effective from Oct 16, is Rs137.79 per litre while high speed diesel will sell for Rs134.48.

Similarly, the prices of kerosene and light diesel oil (LDO) were increased by Rs10.95 and Rs8.84 per litre respectively. The new price of kerosene is Rs110.26 per litre and that of LDO is Rs108.35 per litre.

“In the current scenario, the government has absorbed the pressure and provided maximum relief to the consumers by keeping Petroleum Levy and sales tax to minimum. Therefore, prices worked out by OGRA have been approved,” the finance ministry’s notification stated.

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The notification stated that oil prices in the international market had risen around $85 a barrel which was the highest since October 2018.

“Importantly, entire energy chain prices have witnessed a strong surge in the past couple of months due to higher demand for energy inputs and supply bottlenecks,” it further stated.

It is pertinent to mention here that the government had raised the price of petrol by Rs4 per litre at the start of the month as well. The masses had already been bearing a heavy brunt of significant hike in daily use items, life saving medicines, electricity etc.

Meanwhile, speaking with Profit, industry experts said that the government could have avoided passing on a massive hike in the prices of petrol and diesel if it had decided to suspend the 10 per cent custom duty which was imposed in their per litre prices.

“The hike could have been postponed for the remaining fifteen days of the current month if the government had suspended custom duty on their prices,” they said.

They added that the custom duties were imposed to use the amount in the up-gradation of oil refineries and it was expected that the collected amount would be provided to refineries from the next year.

The government would now earn more revenue through GST collection from October 16, till the end of the month on the sale of petrol and diesel compared to the revenue collection collected in rupees on account of GST from October 1 till October 15.

The government has been earning a major chunk, roughly 25pc, of total revenue generation from the oil sector. Custom duty, IFEM, petroleum levy, dealer’s commission, and OMC’s margin are charged on the sale of petrol and diesel.

Meanwhile, justifying the record increase of petroleum prices in Pakistan, Finance Minister Shaukat Tarin on Saturday said prices were increasing globally and not just in the country.

Speaking to the media in Washington alongside Finance Secretary Yousuf Khan, Governor SBP Dr. Raza Baqir, and Pakistan’s Ambassador to the United States Dr Asad Majeed Khan, Tarin said that the present government’s structural reform measures have been appreciated, improving the country’s economy.

“Comprehensive measures are being taken to improve the track and trace of Pakistan’s tobacco, cement, sugar, and beverages industries. We will increase the tax to GDP ratio to 20pc in the next four to five years,” Tarin said.

 

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Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected]

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