ISLAMABAD: The general public may not be passed on an estimated Rs 2.80 per litre price reduction in petrol price in case of the adjustment of the petroleum levy (PL) rates to meet International Monetary Fund (IMF) conditions.

Although the average price of petrol, globally, has come down in the last fifteen days and market experts have worked out Rs 2.80 per litre reduction in petrol price, rates of high-speed diesel (HSD) may go up by Rs 3.50 per litre for the next fortnight, effective from November 1, 2022.

In the last review of the petrol price on October 15, the government adjusted Oil and Gas Regulatory Authority’s (OGRA) recommended reduction of Rs 14.84 per litre in the PL. As a result, the PL rate was increased from Rs 32.42 to Rs 47.26 per litre. The PL rate on HSD was revised downward from Rs 12.58 to 7.14 per litre in the last review.

The estimates are based on current government taxes and PSO exchange loss adjustment.

PSO is seeking an exchange loss adjustment of Rs 5 per litre in petrol and Rs 4 per litre in HSD. These adjustments are being sought due to exchange rate variation in import of petrol and HSD.

As high speed diesel is used in transport and agriculture sectors; therefore, revision in its price will have direct impact on consumers.

The proposed revisions are subject to no increase or decrease in PL and, GST imposition.

Officials also say that the government may increase tax on petrol and keep its price unchanged to make more revenue on sale of this product.

The officials said that price of HSD may go up by around Rs 3.50 per litre from Rs 235.30 per litre to Rs 238.80 per litre.

In this calculation, the margin of Oil Marketing Companies (OMCs) and dealers on sale of petroleum products would be Rs3.68 per litre and Rs7 per litre, respectively.

This fortnight the average exchange rate taken has been Rs220.58, down by Rs 0.44 per litre compared to Rs 221.02 per litre during the last fortnight.

As PSO imports petroleum products, the state-run oil marketing company is allowed exchange rate adjustments to save itself from losses.

In an attempt to minimise the impact of oil prices on the masses, the government devised a new formula for calculating the exchange rate for oil price revision. The revised formula it is now taking the average exchange rate. It has taking the exchange rate of the last day.

Copyright Business Recorder, 2022