POL products’ prices: OMCs estimate up to Rs28.44/litre hike

ISLAMABAD: Oil refineries and Oil Marketing Companies (OMCs) have estimated up to Rs 28.44 per litre raise in the prices of petroleum products with effect from August 1.

Based on current rate of petroleum levy (PL), the estimated ex-depot price of petrol may rise by Rs 6.53 per litre, high speed diesel (HSD) price by Rs 28.44 per litre, kerosene oil price by Rs 11.02 per litre and light diesel oil (LDO) price by Rs 5.64 per litre.

The prices of petrol and HSD will further increase if government includes Rs 7 per litre petroleum dealers’ margin in the prices.

The Economic Coordination Committee (ECC) on Thursday approved the increased margin of petroleum dealers from Rs 4.90 to Rs 7 per litre.

Petroleum dealers’ association called off its strike on July 18, 2022 following government’s assurance that the margin will be implemented with effect from August 1, 2022.

Hike in POL products’ prices on the cards

This projected rise in the prices would take the prices of petrol from Rs 230.24 to Rs 236.77 per litre, HSD from Rs 236.00 to Rs 264.44 per litre, SKO from Rs 196.45 to Rs 207.47 per litre and LDO from Rs 191.68 to Rs 197.32 per litre.

At present the PL on petrol stands at Rs 10 per litre, on HSD, SKO and LDO at Rs 5 per litre each while sales tax is zero.

Finance Division on Saturday (today) will move a summary seeking up to an estimated 11 percent raise in petroleum prices with effect from August 1. As usual, the final decision in this regard will be taken by the Prime Minister. The National Assembly approved a rise in the maximum limit of PL from Rs 30 per litre to Rs 50 per litre to achieve the budgetary target of Rs 750 billion in Finance Bill 2022-23.

Sources in Petroleum Division told this correspondent that the government is unlikely to fetch Rs 750 billion from PL in the current financial year at the current PL rate as that would enable a maximum collection of Rs14 billion per month. Additionally, a revenue shortfall of Rs 45 billion per month would be experienced if the 17 percent general sales tax (GST) is not slapped on these products.

In the last 14 days, international crude oil price has climbed from $ 101.16 per barrel from $ 107.14 per barrel. The US dollar rate against Pak rupee rose from Rs 210 on July 15, 2022 to Rs 238 on July 28, 2022.

Copyright Business Recorder, 2022