Rs5 PL hike on HSD may not help govt achieve Rs31bn monthly target

ISLAMABAD: An increase of Rs5 per litre petroleum levy (PL) on high-speed diesel (HSD) may not help the government to achieve a monthly target of Rs31 billion due to low petroleum consumption expected in the second half of December.

The Finance Division has raised the PL on HSD from Rs25 to Rs30 on HSD with effect from December 16. The PL on petrol has been kept unchanged at Rs50 per litre same as the first half of December 2022. There was no general sales tax (GST) on petroleum products at the moment. Both these petroleum products are a major source of generating revenue.

The government is anticipating 382,120 million tons of petrol and 340,855 million tons of HSD, 4,000 million tons of kerosene oil, and 925 million tons of LDO in the second half of December 2022. In November, the country witnessed a 15 percent decline in petroleum product sales.

Total petroleum products’ sales clocked in at 1.55 million tons in November 2022, displaying a decline of 12 percent on a year-on-year basis amid overall economic slowdown, higher petroleum prices, and lower FO-based power generation.

Cut in prices of petrol, diesel announced

According to documents available with Business Recorder, the government made adjustments in the price built-up of maximum depot price both petrol and HSD for the second fortnight of December as compared with the first half of December 2022.

The Finance Division allowed Pakistan State Oil (PSO) for adjustment of exchange loss on petrol and HSD by Rs1.48 per litre and Rs1.43 per litre respectively. The exchange rate adjustment on petrol has been raised from Rs3.25 per litre to Rs4.73 per litre and on HSD, it has been increased from Rs2.01 per litre to Rs3.44 per litre.

As per the working of the Oil and Gas Regulatory Authority (Ogra), the average of Platts with incidentals and duty including premium has declined from Rs193.99 per litre to Rs182.95 per litre or a decline of Rs11.03 per litre on HSD. The average of Platts with incidentals and duties on petrol was also declined from Rs153.86 per litre to Rs144.53 per litre or Rs9.34 per litre decreased.

The rates of Inland Freight Equalization Margin (IFEM) have also been revised on both petroleum products with effect from December 16.

The IFEM rates on petrol have decreased from Rs6.69 to Rs3.54 per litre and 80 paisas from Rs1.90 per litre in the first half of December.

Copyright Business Recorder, 2022