ISLAMABAD: Days before Eidul Fitr, the government on Sunday increased the price of petrol by Rs9.66 per litre and reduced that of high-speed diesel (HSD) rate by Rs3.32 per litre for the next fortnight ending April 15.

In a late-night announcement, the Ministry of Finance said the price of petrol (motor gasoline) had increased in the international market during the last fortnight, while the price of HSD has marginally declined. Therefore, the ministry decided to “revise the existing consumer prices of petroleum products”.

In the latest price review, the petrol price has been increased to Rs289.41 per litre for the next fortnight from Rs279.75, up by 3.45 per cent (Rs9.66). However, the fuel will be available in the retail market for at least Rs290 per litre.

Petrol is mostly used in private transport, small vehicles, rickshaws, and two-wheelers and has a direct bearing on the budgets of the middle and lower-middle classes.

High-speed diesel cut by Rs3.32 per litre, LPG down by Rs6.44 per kg

On the other hand, the high-speed diesel price has been reduced by Rs3.32 per litre to Rs282.24 for the next 15 days, compared to Rs285.56 over the past fortnight.

Most of the transport sector runs on HSD. Its price is considered inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube wells and threshers and particularly adds to the prices of vegetables and other eatables.

The government did not announce the prices of kerosene and light diesel oil (LDO). Kerosene is mostly used by unscrupulous elements to mix with petrol and, to some extent, for lighting in very remote areas, while LDO is consumed by flour mills and a couple of power plants.

Officials said the price of petrol had increased by about $4 per barrel to $94.5 per barrel, and its import premium further went up to $13.5 per barrel against $12.15 a fortnight ago because of the geopolitical situation.

The HSD’s price, on the other hand, was down in the international market and its import premium paid by the benchmark Pakistan State Oil (PSO) remained unchanged at $6.50 per barrel.

The exchange rate has also improved to the rupee’s advantage by about Re1 per dollar to Rs278.6 over the fortnight.

At present, the government is charging about Rs82 per litre tax on petrol and HSD.

Although the general sales tax (GST) is zero on all petroleum products, the government charges Rs60 per litre petroleum development levy (PDL) on both products. The government also charges about Rs19-20 per litre customs duty on petrol and high-speed diesel.

Both fuels are the major revenue spinners, with their monthly sales of about 700,000 to 800,000 tonnes compared to just 10,000 tonnes of monthly demand for kerosene.

The Rs60 per litre PDL on petrol and HSD is the maximum permissible limit under the law.

The government set a budget target to collect Rs869 billion as a levy on petroleum products during the current fiscal year under the commitments made with the IMF.

Meanwhile, the Oil and Gas Regulatory Authority has reduced the price of liquefied petroleum gas (LPG) by 2.5pc or Rs6.44 per kg for April.

Published in Dawn, April 1st, 2024