The government of Pakistan has increased the petrol price by Rs25.58 per liter, taking it back to Rs100. The new prices will be implemented from today, June 27, 2020.
According to a notification by Finance Ministry, the price of high diesel has been increased by Rs21.31. The price of Kerosene oil and light diesel are increased by Rs23.50 and Rs17.84, respectively.
The Oil and Gas Regulating Authority (OGRA) recommends new petroleum prices at the end every month. However, this time the Petroleum Division has suggested this massive hike in the prices. After reduction of prices of crude oil in international market, the government had cut petrol prices for four times since March. The reduction took the price from Rs116.56 to Rs74.5 per liter.
The statement by Finance Ministry also read that the decision to revise the prices of petroleum products upwards was taken “in the view of rising oil prices in global market.”
The government determines local petrol prices based on past prices of international oil. It calculates the prices by keeping view the rates at which crude oil was imported by the country. The means the petrol you use today was imported in its raw form around 45 days earlier.
Petrol Levy:
Earlier, when petrol was at Rs74.5 per liter, the government was criticized for imposing record-high Petroleum Levy (PL) on petroleum goods. According to statistics, federal government increased the PL on petrol by 20.3%, taking it from Rs19.73 to Rs23.76 per liter. Meanwhile, high-speed diesel was hiked from Rs25.05 to Rs30 per liter. Moreover, the PL on Kerosene oil and light-speed diesel stands at Rs18.02 and Rs11.18 per liter, respectively.
New Tax, Cost and Base Price:
After this fresh jump in the prices, there are no reports that government has once again increased the PL. According to economists, the ruling party was receiving 54.8% (Rs40.83) on petrol, with 13% (Rs9.70) costs and base price at 32.2% (Rs23.99) per liter. After June 26 increase, new increase the tax is 44.5% (Rs44.50), costs are 9.7% (Rs9.70), while base price has jumped to 45.8% (Rs45.86).
The economists believe that base price is increased by 90%, which will eventually give benefit to Oil Marketing Companies (OMCs). On the other hand, international market has seen increase of only 17% in crude oil price during last month.
After the recent hike, a news started circulating that the government has decided to cut petrol prices by Rs10 from July 1. The reports said that the government has decided to reduce PL to give some relief to consumers. However, no such step was taken and prices remained same.
It is yet to be seen whether government will reduce its PL on petrol or keep it same for the time being.
