ISLAMABAD: The federal government ordered a significant raise in petrol price by up to Rs 9.66 per litre, effective from April 1, 2024, further adding financial burden on 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.

The government passed on its full impact to general masses ahead of Eid-ul-Fitr, with the rate of petrol surpassing the high-speed diesel (HSD) price. The petrol price is raised from Rs279.75 to Rs289.41 per litre.

There has been a decrease of Rs3.32 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. The new price of HSD has been fixed at 282.24 per litre which was Rs 285.56 per litre in previous fortnight.

The Oil and Gas Regulatory Authority (Ogra) sent its recommendation of petroleum prices on March 31, 2024, and the federal government announced the price in light of these recommendations.

Currently, the government imposes a petroleum levy (PL) of Rs60 per litre, around 21.5 percent of the current petrol price of Rs289.41 per litre. However, since February 2022, the federal government has maintained a zero GST rate on petroleum products.

Sources in Petroleum Division revealed that government is considering introducing a carbon tax at import stage of petroleum products at Rs 30 per litre instead of imposing 18 percent GST on the 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); however, said that there are currently no proposals under consideration to impose sales tax on petroleum products.

On Sunday, Finance Division stated that the price of Petrol (Motor Gasoline) has been increased in the international market during the last fortnight, while the price of HSD marginally declined. The government has accordingly decided to revise the existing consumer prices of petroleum products.

It further stated that price adjustments are in line with government’s policy of passing on the variations of prices in the international market to the domestic market. The consumer price of HSD has accordingly been decreased once again, after a downward revision in the middle of March, 2024.

Copyright Business Recorder, 2024

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