ISLAMABAD: Despite a drop in international prices, the government on Wednesday left the prices of major petroleum products – petrol and high speed diesel (HSD) – unchanged for the next fortnight ending Dec 15.

In reaching this decision, the government on the other hand, increased petroleum levy on HSD by Rs10 per litre to about Rs22.60 besides increasing the profit margins of oil marketing companies (OMCs) on the sales of both products.

However, the government reduced the prices of two other inconsequential products — kerosene and light diesel oil (LDO) — by Rs10 and Rs7.50 per litre, respectively for the fortnight.

The announcement for adjustments in prices of petrol, high-speed diesel, kerosene and light diesel was made by Finance Minister Ishaq Dar on national hookup through a pre-recorded message. He said the prices of petrol and diesel would be maintained at the existing position for the next 15 days, adding the HSD price had not changed in nearly two months.

As such, the ex-depot price of petrol and HSD would remain unchanged at Rs224.80 and Rs235.30 per litre, respectively, for Dec 1-15.

On the other hand, the ex-depot price of kerosene was cut by Rs10 to Rs181.83 per litre instead of Rs191.83 at present. Likewise, the price of LDO was reduced by Rs7.50 to Rs179 per litre.

Based on existing charges, the petrol and HSD prices should have gone down by about Rs5 and about Rs14 per litre. However, the government increased OMC’s margin to Rs5 and Rs4 per litre on petrol and HSD, respectively, from Rs3.68 per litre at present.

In line with a commitment to the IMF, the government also increased the petroleum levy on HSD by Rs10 per litre.

At present, the GST is zero on all the key products including petrol, HSD, kerosene and LDO. The government is, however, charging about Rs50 per litre PDL on petrol and Rs22.59 per litre on HSD. The government is also charging about Rs15 to Rs19 per litre customs duty on petrol and HSD, respectively.

Petrol and HSD are the major revenue spinners with their monthly sales of about 700,000–800,000 tonnes per month compared to just 10,000 and 2,000 tonnes demand for kerosene and LDO respectively.

Published in Dawn, December 1st, 2022