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Petrol may hit Rs290 ahead of Eid

ISLAMABAD: Ahead of Eidul Fitr, the petrol price is estimated to go up by about Rs10-11 per litre on Sunday (March 31) for the next fortnight, owing mainly to higher import premiums and global prices.



However, the price of another key fuel, high-speed diesel (HSD), is likely to drop by up to Rs2 per litre.



Given petrol’s current ex-depot price of around Rs280 per litre, the coming review may take its rate beyond Rs290.



Informed sources said the import price of petrol has increased by about $4 per barrel, and its import premium has further gone up to $13.5 per barrel from $12.15 a fortnight ago because of the geopolitical situation. As a result, the price of petrol is estimated to rise by Rs10-11 per litre, depending on the final exchange rate calculation.




Price of high-speed diesel expected to drop by up to Rs2 per litre




On the other hand, the HSD price was down in the international market, and the import premium paid by Pakistan State Oil (PSO) remained unchanged at $6.50 per barrel. Thus, the rate of high-speed diesel was estimated to be down by Rs1.30 to Rs2.50 per litre, subject to the final exch­a­nge rate adjustment in pricing.



For price calculations, officials said the price of petrol had gone up by about $4 per barrel to $94.5 over the last two weeks, while HSD’s price inched down by about 60 cents per barrel to $98.4. The exchange rate has also improved, with the rupee gaining by about 1 per dollar to $278.6 over the fortnight.



In its previous fortnightly review, the government kept the petrol price unchanged at Rs279.75 per litre and reduced HSD’s rate by Rs1.77 per litre to Rs285.56.



The government is already charging a petroleum development levy (PDL) of Rs60 per litre — the maximum permissible limit under the law — on both petrol and HSD. Under the commitments made with the International Monetary Fund (IMF), the government set a budget target to collect Rs869 billion in PDL during the current fiscal year.



It has already collected about Rs475bn in the first half (July-December) and is expected to mop up about Rs970bn by the end of the fiscal year, although the annual target has now been revised to Rs920bn.



Petroleum and electricity prices have been the key drivers of high inflation. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers and directly affects the budgets of middle and lower-middle classes.



On the other hand, an increase in HSD’s price is considered highly inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube wells and threshers. It also adds to the prices of vegetables and other eatables.



At present, the government is charging about Rs82 per litre tax on both petrol and HSD.



However, there is no general sales tax (GST) on any petroleum product.



Compared to Rs60 per litre PDL on both products, the government is charging Rs50 levy on high-octane blending component and 95 research octane number petrol. The government is also charging about Rs19-20 per litre customs duty on petrol and HSD.



Both fuels are the major revenue spinners, with their monthly sales of about 700,000 to 800,000 tonnes compared to 10,000 tonnes of monthly demand for kerosene.



Published in Dawn, March 30th, 2024


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