Given the decrease in fuel prices on the global market, consumers may receive some relief from Pakistan’s government.
The price of diesel is anticipated to drop by more than 20 rupees a liter, according to the nation’s oil industry.
According to reports, the government may adjust the petroleum development levy and the supply cost sustained by Pakistan State Oil (PSO) in order to maintain the price of diesel for the first half of March if the general sales tax (GST) on diesel is raised.
To make up for a revenue shortfall in the current fiscal year, it has already decided to raise the petroleum levy on diesel by Rs. 5 per liter beginning in March and by an additional Rs. 5 per liter beginning in April.
Increase in Diesel Levy as per IMF Program
According to sources, the local news channel was informed that the fuel tax on high-speed diesel will increase from the current rate of Rs. 40 per liter to Rs. 50 per liter as per an agreement with the International Monetary Fund (IMF) under its loan program.
The price of high-speed diesel should decrease by Rs. 21.69 to Rs. 258.31 per liter from the current Rs. 280 per liter, according to estimations from oil marketing companies.
The computation is based on prices provided by Platts, a Rs. 10 per liter PSO exchange rate adjustment, and the current GST and petroleum levy rates.
The ex-depot price of petrol, which is now listed at Rs. 272 per liter, may also be reduced by Rs. 7.70 to Rs. 264.30.
Kerosene oil’s price is anticipated to decrease by Rs. 22.98 per liter, from Rs. 202.73 to Rs. 179.75, while light diesel oil’s (LDO) price is anticipated to decrease by Rs. 13 per liter, from Rs. 196 to Rs. 183.
In order to close the revenue shortfall, the government may decide to increase the petroleum levy by Rs. 10 per liter in order to make a lower-than-required drop in the price of high-speed diesel.
Although the petroleum levy target has been set at Rs. 855 billion, it is anticipated that only Rs. 680 billion would actually be collected by the end of the current fiscal year in June.
The government has agreed to increase the petroleum levy on diesel by Rs. 5 per liter each in March and April in order to close the gap of Rs. 175 billion.
A petroleum fee of Rs. 50 per liter is levied on petrol and high-octane blending component (HOBC).
Diesel has an average monthly consumption of more than 500,000 tons and is utilized extensively in the transportation and agricultural industries. Its usage for the month of February’s 28 days is predicted to be 565,000 tons.
Farmers will benefit from the price cut during the crop planting season, when diesel use rises.
The government has been attempting to maintain an artificial lid on fuel prices ever since Ishaq Dar was appointed finance minister, but the oil industry has not been pleased.
To read our blog on “Govt. increased petrol prices again by Rs. 22.20/liter,” click here.
