November 16, 2021 (MLN): The government on Monday decided to maintain the price of petroleum products for the next fortnightly in order to provide maximum relief to the general public.
Despite rising petroleum product prices globally, the Prime Minister of Pakistan has kindly rejected the proposal for enhancement in the prices, a notification issued by Finance Division said.
Given this, the prices of petroleum products from November 16, 2021, shall remain the same as notified on November 4, 2021.
“The government will bear the burden by making adjustments in the sales tax rate, etc,” it added.
To recall, the government had increased the price of petrol by Rs8.03 per litre, a day after Prime Minister Imran Khan announced a relief package of Rs 120 billion whereby he warned that the POL prices would have to be increased further.
As per the latest notification, the per litre price of petrol, high-speed diesel (HSD), Kerosene (SKO), and Light diesel will stay the same for the next fifteen days at Rs145.82, Rs142.62, Rs116.53, and Rs114.07, respectively.
According to a statement issued by the Prime Minister's Office (PMO), the Oil and Gas Regulatory Authority (OGRA) suggested a price hike of Rs5 per litre in the price of petrol to the Finance Division on the back of rising international oil prices and variation in the exchange rate. The same was presented to the Prime Minister.
With regards to the sales taxes and petroleum levy (PL), the summary noted that existing sales tax on petroleum products are below the benchmark rate of 17%, ranging from 0.20% to 6.75% while, the PL is charged between Rs0 per litre to Rs9.62 per litre, against the budgeted PL rate of Rs30 per litre.
A sharp increase in petroleum prices has been witnessed in the span of the last two months primarily owing to the global price hike. Despite this, the overall sales volume of the oil and marketing industry had increased by 17% YoY to stand at 1.99MTs during the month of October’21 as compared to 1.69MTs in the same month a year ago. This was the highest monthly sales after May 2018 and the 5th consecutive month that sales were above 1.9MTs.
The YoY growth in industry sales was largely supported by a surge in economic activity amid higher exports, imports, and growth in LSM on account of rising demand from both local and foreign consumers.
Owing to the significant surge in fuel prices, the transport index also contributed to an increase in inflation as it soared by 14.4% YoY and 5.27% MoM in the month of October'21.
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