The federal government on Friday increased the price of petrol by Rs25.58 per litre for the month of July in line with the hike in global crude oil prices.
According to details, the real impact of increase in petrol was Rs31 per litre based on the data and working made by Pakistan State Oil (PSO). However, the government decided to increase the price of petrol by Rs25.38 per litre that would be effective immediately i.e June 26.
According to a notification issued by the Finance Division, the price of petrol has been increased from existing Rs74.52 to Rs100.10 per litre. The price of diesel has gone up to Rs101.46 from Rs80.15 with an increase of Rs21.31 per litre. Diesel is used in agriculture and transport sectors and therefore increase in its price would affect these sectors and inflation would go up.
The price of kerosene oil has been hiked by Rs23.50 per litre from current Rs35.56 to Rs59.06 per litre. This price is used in remote areas where LPG is not available for cooking purpose.
The price of light diesel oil has risen by Rs17.84 from Rs38.14 to Rs55.98 per litre. This fuel is used for industry.
After the increase, the government will continue charging Rs30 per litre petroleum levy on petrol and diesel, Rs6 per liter on kerosene oil and Rs3 per litre LDO.
The government had last month reduced prices of all petroleum products except high speed diesel to partially pass on the impact of massive international price reduction to the masses.
The government has already increased the general sales tax (GST) on all petroleum products to a standard rate of 17pc across the board to generate additional revenues. Until January last year, the government was charging 0.5pc GST on light diesel oil (LDO), 2pc on kerosene, 8pc on petrol and 13pc on HSD.
Besides the 17pc GST, the government has almost quadrupled the rate of petroleum levy on HSD and petrol to Rs30 per liter from Rs8 per liter in January last year.
Over the last many months, the government had been increasing petroleum levy rates to partially recoup a major revenue shortfall faced by the FBR. The levy remains in the federal kitty unlike GST that goes to the divisible pool taxes and thus about 57pc share is grabbed by the provinces.
Average petrol sales are touching 700,000 tonnes per month against the monthly consumption of around 600,000 tonnes of diesel. However, the sales of petrol had dropped in recent weeks due to the coronavirus lockdown. The diesel consumption had also dropped after the lockdown but has since picked up owing to wheat harvest. The sales of kerosene oil and LDO are generally less than 11,000 and 2000 tonnes per month.
© Pakistan Press International, source Asianet-Pakistan