Petroleum prices likely to be kept steady

ISLAMABAD: The petroleum prices are estimated to generally remain stable for the next fortnight starting March 16, informed sources said.

They said the premium on petrol import had increased to $12.15 per barrel from $10.45 in February but exchange rate and international product prices remained range bound. The premium on the import of high-speed diesel (HSD) has remained unchanged at $6.50 per barrel. As a result, the calculations suggest the petrol price going up by about a rupee per litre while HSD going down by less than Re1 per litre.

Therefore, the government had the cushion to maintain both prices through exchange rate and inland freight equalisation margin (IFEM) adjustments of the two projects. The prices of kerosene and light diesel oil are also expected to remain stable.

The government has already achieved a Rs60 per litre petroleum levy — the maximum permissible limit under the law — on both petrol and HSD. The government had set a budget target to collect Rs869bn as petroleum levy on petroleum products during the current fiscal year under the commitments made to the International Monetary Fund (IMF).

It has already collected about Rs475bn in the first half (July-December) of the current fiscal year although the per litre levy was gradually increased. The government is expected to mop up about Rs970bn by the end of the year although the revised target has now been set at Rs920bn by end-June.

At present, the government is charging about Rs82 per litre tax on both petrol and HSD. Although the general sales tax (GST) is zero on all petroleum products the government is charging Rs60 per litre PDL on both products.

Published in Dawn, March 14th, 2024