ISLAMABAD: The government on Sunday reduced the price of petrol and increased that of diesel and kerosene with immediate effect for the next fortnight. It increased the rate of petroleum development levy (PDL) on all products to meet an outstanding pre-condition of the International Monetary Fund (IMF).

According to an announcement by the finance ministry, the rate of petrol was cut by Rs3.05 per litre while the prices of high-speed diesel (HSD) and kerosene were jacked up by Rs8.95 and Rs4.62 per litre, respectively. The PDL on all products was equalised at Rs15 per litre.

“Owing to the fluctuation in petroleum prices in the international market and exchange rate variation, the government has decided to revise the existing prices of petroleum prices to pass on the impact to consumers,” the ministry said.

The ex-depot price of petrol now stands at at Rs227.19 from Aug 1 to 15 against current rate of Rs230.24 per litre, showing a reduction of Rs3.05 per litre, or a miserly 1.3pc.

Petroleum development levy equalised at Rs15 per litre on all products

The rate of light diesel oil has inched down by an inconsequential 12 paise per litre to Rs191.32 instead of Rs191.44 per litre at present.

On the other hand, the ex-depot price of HSD has been set at Rs244.95 per litre, with an increase of Rs8.95 from the existing rate of Rs236 per litre, showing a 3.8pc rise.

Likewise, the ex-depot rate of kerosene has been fixed at Rs201.07 per litre, with an increase of Rs4.62 from the existing rate of Rs196.45 per litre, up 2.35pc.

The previous PTI government gave a commitment to the IMF for a Rs4 per litre increase in PDL in December 2021 on the first of every month to a maximum of Rs30 per litre but reversed it on Feb 28.

The government had committed a prior action with the IMF to increase PDL by Rs10 per litre on HSD, kerosene oil and light diesel oil (LDO) and Rs5 per litre on petrol to ensure a uniform rate of Rs15 per litre on all products at the start of August.

As of July 31, PDL stood at Rs10 per litre on petrol and Rs5 each on HSD, kerosene and LDO.

On July 14, Prime Minister Shehbaz Sharif announced a reduction of Rs18 to Rs40 per litre in the prices of various products as international prices went down. This was the first time the PML-N-led coalition government reduced petroleum prices after it came to power.

Between May 26 and July 1, the petrol price had increased by 66pc or Rs99 per litre, while HSD price went up by 92pc since May 26 from Rs144.15 per litre, up by 132.39 per litre.

Likewise, the ex-depot price of kerosene had gone up to Rs230.26 per litre, up by 95pc between May 26 and July 1. Similarly, the ex-depot price of LDO went up to Rs226.15 on July 1, up 80pc from Rs125.56 per litre on May 26, up by about Rs100.59 per litre.

Under the deal with the IMF, the government has to gradually increase PDL on oil products to a maximum of Rs50 per litre to collect Rs855bn during the current fiscal year.

The petroleum levy had come to an end on March 1 price revision as international prices went up and the PTI government decided to not only reduce petroleum prices by Rs10 per litre but freeze it for the next four months, i.e. until the end of June.

After initial indecision, the coalition government had been increasing petroleum prices since May 15 under the IMF deal.

At present, the GST is zero on all the key products, including petrol, HSD, kerosene and LDO, against 17pc normal GST. The government is also charging about Rs20 per litre customs duty on petrol and HSD.

Published in Dawn, August 1st, 2022