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Print Print 2024-03-30

Up to Rs10/litre: Significant hike in petrol prices under consideration

  • This rise in petroleum product prices is anticipated without proposed imposition of 18 percent general sales tax
Published March 30, 2024

ISLAMABAD: The federal government is contemplating a significant raise in petrol prices by up to Rs10 per litre, effective from April 1, 2024, further worsening the financial burden on the general public.

The recent surge in petrol prices is attributed to an increase in premium from $12.15 per barrel to $13.507 per barrel, marking a $1.45 per barrel increment.

In case the government passes on full impact on general masses ahead of Eid-ul-Fitr, the price of petrol would surpass high-speed diesel (HSD) price. It would rise from Rs279.75 to Rs289.75 per litre. Additionally, the Inland Freight Equalization Margin (IFEM) on petrol is expected at Rs5.01 per litre.

There may be a slight decrease of Rs1.30 per litre in the price of HSD, as the premium on HSD stands at $6.50 per barrel as in the last two reviews of petroleum products. IFEM is expected at Rs3.76 per litre on HSD.

Petrol prices may be hiked by Rs3.50

The prices of kerosene oil (KERO) and light diesel oil (LDO) are expected to remain unchanged at Rs188.66 per litre and Rs168.18 per litre, respectively.

The Oil and Gas Regulatory Authority (OGRA) will send its recommendation of petroleum prices on March 31, 2024, and the federal government will announce the price in light of the OGRA’s recommendations.

This rise in petroleum product prices is anticipated to occur without the proposed imposition of 18 percent general sales tax (GST). However, if the GST be levied, prices could surge by an additional Rs50 per litre on petrol.

Currently, the government imposes a petroleum levy (PL) of Rs60 per litre, amounting to 21.4 percent of the current petrol price of Rs279.75 per litre.

Again, if the government chooses to impose an 18 percent GST on HSD, the price could increase by Rs53 per litre from the current Rs285.70 per litre.

Since February 2022, the federal government has maintained a zero GST rate on petroleum products.

The International Monetary Fund (IMF) has been asking the government to remove sales tax exemptions on all items, including petroleum products.

An official from the Federal Board of Revenue (FBR) noted that there are currently no proposals under consideration to impose sales tax on petroleum products.

Nevertheless, the estimated revenue from an 18 percent sales tax on petroleum products could range between Rs21 billion to 25 billion per month, based on current consumption levels.

Copyright Business Recorder, 2024

Comments

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Az_Iz Mar 30, 2024 06:14am
If GST is levied, then petrol prices will be just about what they are in India and Bangladesh. So, why can't people in Pakistan pay the same.
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MAZHAR ABBAS Mar 30, 2024 10:54am
if Govt. is holding this solution to increase the commodity rate to run ....it will be disaster and not solution....even single industry is running with 100% capty...inflation ratio already too high.
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test Mar 30, 2024 01:22pm
Game of Elite Class as usual. I mean they will never put tax and duties and technology transfer on imports and importers but they will put additional tax and lavies on patrol, food, medicine, vehicles
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Aam Aadmi Mar 30, 2024 02:03pm
I am glad to hear that. People who voted these people to power must pay for their folly.
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Usman Mar 30, 2024 02:46pm
They should increase it.do not sunisidise it.all those driving should not be financed by the poor who cant even afford a meal.
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test1 Mar 30, 2024 06:23pm
No matter which party comes to power the end result is IMF and a never ending begging cycle from past 75 year. Previous Leadership or New Leadership or Next Leadership it doesn't and will never matter
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test Mar 30, 2024 06:34pm
@Usman, One thing to understand in the world of economics is to set targets & achieve those targets. Those include exports, investment, supply chains, jobs, infrasctrure, industry, gdp, average income
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Gobble Mar 30, 2024 06:55pm
Excellent News !!! They should also levy the 18% GST so that petrol price reaches 345 PKR
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Test Mar 30, 2024 07:06pm
@Az_Iz here people have addiction of subsidy and free lunch.
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Ammad Khan Mar 30, 2024 10:15pm
The Lower GDP Growth In PMLN and PDM Government & In PTI Government The GDP Growth All Time High with 6.19% Growth and Lower Fiscal Deficit on GDP and Inflation is down from 12% To 10%
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test Mar 31, 2024 09:30pm
@Ammad Khan, Begging from IMF and then showing growth doesn't make any sense just like from 75 years. Genuine growth is shown by exports, industrialization, investment, country gdp, per capita income.
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