Despite a 3 percent drop in international oil prices, Pakistan is preparing to increase oil prices.
Due to exchange rate fluctuations, petrol prices are likely to increase by about Rs 4 per liter on Friday for the 15 days starting March 1.
Informed sources say that according to the final estimate on February 28, the price of ex-depot petrol is estimated to increase by Rs 4 to 4.5 per liter, while the price of high-speed diesel (HSD) and kerosene may decrease by less than Rs 1 per liter.
The increase in petrol prices is estimated due to a slight increase in international rates and a decrease in the exchange rate against the dollar. Benchmark Brent prices have generally been stable over the past 10 days.
The current price of ex-depot petrol is Rs 256.13 per litre and high-speed diesel is Rs 263.95 per litre. The official price of kerosene is Rs 171.65 per litre, but it is being sold at Rs 300 to Rs 350 per litre.
Petrol is mainly used in private transport, small vehicles, rickshaws and two-wheelers and it directly affects the budget of the middle and lower middle class.
Most of the transport sector runs on HSD, its price is considered inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines such as trucks, buses, tractors, tube wells and threshers, which increases the prices of vegetables and other food items.
The government is collecting about Rs 76 per litre of tax on petrol and HSD, although the General Sales Tax (GST) on all petroleum products is zero, but the government collects a Petroleum Development Levy of Rs 60 per litre on both products, which generally affects the public.
The government collects about Rs 16 per litre of customs duty on petrol and HSD, irrespective of whether they are locally produced or imported, in addition to which oil companies and their dealers collect about Rs 17 per litre of distribution and sales margin on both products.
On the other hand, light diesel and high-octane blending products are charged at Rs 50 per litre and 95-RON petrol used by the wealthy in luxury imported vehicles is charged at Rs 50 per litre.
Petrol and HSD are major revenue spinners, with monthly sales of around 700,000 to 800,000 tonnes, while the demand for kerosene is only 10,000 tonnes.
