Even though the oil price has decreased worldwide during the last few days, the Pakistan government has announced increasing the fuel and HSD for the next fortnight. The new petrol will begin from November 1 with a price of Rs. 248.38 per litre after it rises by Rs. 1.35 per litre.
HSD is also likely to rise by Rs. 3.85 per litre and will be priced at Rs. 255.14 per litre. According to the Finance Ministry, this new version takes into account the new calculations of OGRA that incorporate market changes worldwide and also locally in the regulatory expenses.
Pakistan Increases Fuel Prices but Kerosene Price Cuts
However, the government cut prices on other categories of fuel. Kerosene cut Rs. 1.48 to Rs. 161.54 a litre, while light diesel oil will decline by Rs 2.61 at Rs. 147.51 a litre. These cuts seem to form part of the overall strategy the government seems to employ in pricing fuels, finding an equilibrium between global volatility and domestic fiscal demands.
Crude oil eased a bit on the international front as petrol decreased from $77.5 to $76 per barrel, and HSD from $86.5 to around $84 per barrel. However, in Pakistan, domestic prices keep rising as import premiums continue to stay at $8.7 for petrol and $5 for HSD for the last fortnight, and the exchange rate remains stable too, which keeps import costs stable.
The government collects substantial amounts as levy from the fuel sources, of Rs. 60 per litre for both petrol and HSD and a customs levy of Rs. 16 per litre on all imported and indigenously sourced fuels. Secondly, Rs. 17 per litre is given in the name of distribution and sale margins to oil companies and distributors. No general sales tax on petroleum products prevails in the country. These aggregated charges, in turn, determine consumer prices.
In addition, this adjustment will echo with far-reaching and profound implications on the pockets of Pakistan citizens in terms of personal transportation expenses as well as general goods transport expenditures.
