First half of March: Fuel prices may be kept unchanged by adjusting PL

ISLAMABAD: The federal government may keep the prices of fuel unchanged in the first half of March (1-15) by adjusting the petroleum levy (PL) and cost of supply of Pakistan State Oil (PSO), sources said.

According to oil marketing companies’ estimates, the price of high-speed diesel has recorded a decline in price by Rs21.69 per litre from Rs280 to Rs258.31 per litre. The working is based at platts prices, PSO exchange rate adjustment of Rs10 per litre, and the current rate of PL and the general sales tax (GST).

The ex-depot price of petrol may also roll back by Rs7 per litre from Rs272 to Rs264 per litre. The other products kerosene oil (KERO) has supposed to come down by Rs22 per litre from Rs202 to Rs179 per litre and light diesel oil (LDO) by Rs13 per litre from Rs196 to Rs183 per litre.

Rs9.92/litre on petrol, Rs13.12 on HSD: PSO allowed exchange rate adjustment

The government may opt to adjust the reduction by raising the PL on HSD by Rs10 from Rs40 to Rs50 per litre. In order to meet a shortfall in revenue, the government is likely to increase the rate of the PL.

While the government had targeted a collection of Rs855 billion on account of PL, its projected collection only amounted to Rs680 billion. Therefore, in order to bridge this gap of Rs175 billion, the government decided to increase the rate of PDL by Rs5 per litre on diesel from March 1 and Rs5 per litre from April 1, 2023, sources said.

The government has been charging Rs50 levy per litre on petrol since November 2022 and High-Octane Blending Component (HOBC).

Diesel, widely used in the agriculture and transport sectors, has a monthly consumption of over 500,000 metric tonnes. In the 28 days of February, consumption was estimated at 565,000 metric tonnes. The price increase, however, is most likely to affect farmers entering crop sowing season – during which ordinarily consumption increases.

The oil industry has claimed that it has faced a huge loss of Rs35.88 billion in the wake of artificial control of the government over petroleum product prices.

Of the total loss of around Rs36 billion, currency exchange loss is estimated at Rs32.6 billion for the second fortnight of February 2023 owing to the artificial adjustment of oil prices.

Separately, the industry is incurring a loss of about Rs3 billion on account of customs duty and Rs300 million due to low margins.

The total loss does not include the impact of the rupee-dollar exchange loss.

Copyright Business Recorder, 2023