Petroleum prices reach record levels

Published February 16, 2022
Customers gather to buy petrol at a petrol station in Karachi. — Reuters/File
Customers gather to buy petrol at a petrol station in Karachi. — Reuters/File

ISLAMABAD: The government on Tuesday increased the prices of all petroleum products by Rs10 to Rs12 per litre for next fortnight ending on Feb 28 to pass on the impact of higher international oil prices and application of additional petroleum levy, as committed to the International Monetary Fund (IMF).

These are the highest-ever prices of all the products and also perhaps the highest-ever increase in their prices in one go.

The Ministry of Finance announced the decision after Prime Minister Imran Khan agreed to raise levy on all petroleum products by Rs4 per litre to honour commitment made with the IMF for smooth continuation of ongoing Extended Fund Facility (EFF). However, GST rate on all these products was kept unchanged at zero.

The benchmark crude prices have increased by about 3pc to $95 per barrel in the international market during the last fortnight.

The statement said the PM approved the recommendation to increase the prices of petroleum products in line with change in the international oil prices.

According to a notification issued by the Ministry of Finance, the ex-depot price of petrol was fixed at Rs159.86 instead of Rs147.83 per litre at present, up by Rs12.03 per litre or 8.14pc. The petroleum levy on petrol was increased from Rs13.92 to Rs17.92 per litre. The government is also charging about Rs12 per litre on petrol as customs duty.

The ex-depot price of high-speed diesel (HSD) was raised from Rs144.62 to Rs154.15 per litre, showing an increase of Rs9.53 per litre or 6.6pc. The petroleum levy on HSD was increased from Rs9.30 to Rs13.30 per litre in addition to Rs12 per liter customs duty.

The ex-depot price of kerosene oil was also increased from Rs116.48 to Rs126.56 per litre, up by Rs10.08 or 8.65pc. The petroleum levy on kerosene was increased from Re1 to Rs5pc per litre.

The ex-depot price of light-diesel oil (LDO) was also jacked up from Rs114.54 to Rs123.97, up by Rs9.43 or 8.23pc. The petroleum levy on LDO was raised from Rs5.50 to Rs9.50 per litre.

All jet fuel prices were also increased. The price of JP-1 was raised by Rs11 per litre to Rs140.65 while JP-8 price was increased by Rs7 per litre to Rs135.72. The E-10 fuel (ethanol petrol) was also increased by over Rs10 per litre to Rs157.35. These three products also contain 17pc GST but no PL.

While announcing the price hike, the finance ministry said the prices of petroleum products were showing drastic increase in the international market and were at the highest level since 2014.

Interestingly, the domestic prices of petrol and HSD in 2014 hovered between Rs110 and Rs120 per litre.

It said the prime minister had deferred price review on January 31 and provided relief to consumers through reduced GST and OL and was bearing about Rs35bn fortnightly revenue loss.

At present, the GST is zero on all the key products including petrol, HSD, kerosene and LDO against 17pc normal GST. The government is charging petroleum levy of Rs17.92 per liter on petrol, Rs13.30 on HSD, Rs9.50 on LDO, Rs5 on kerosene and Rs30 per litre on high octane blending component. The government is also charging about Rs12 per litre customs duty on petrol and HSD.

Published in Dawn, February 16th, 2022

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