Fuel prices in Pakistan likely to hit PKR 8.50 per litre

As the situation in the Middle East continues to unfold, the higher international market is estimated to push up the prices of petrol and high-speed diesel by about Pakistani currency (PKR) 2.50 and PKR 8.50 per litre, respectively, Dawn reported.

According to sources, petrol and high-speed diesel (HSD) prices experienced a rise of approximately USD 4 and USD 4.50 per barrel, respectively, during the last fortnight, prior to the recent escalation.

As a result, projections suggest that petrol prices could increase by PKR 2.50 to PKR 2.80 per litre, while HSD prices may rise by PKR 8 to PKR 8.50 per litre, pending final calculations, as per Dawn.

The import premium on petrol has dropped by almost 21 per cent to USD 10.7 per barrel over the last fortnight when compared to USD 13.50 in last few days of March and the rupee strengthened by about 40 paisa against a dollar to USD 278.20.

According to Dawn, the net impact is estimated to be about USD 2.80 per litre increase in petrol price from the existing rate of USD 289.41.

The HSD price, on the other hand, was up in the international market and its import premium paid by the benchmark Pakistan State Oil remained unchanged at USD 6.50 per barrel.

HSD rate was thus estimated to be higher by PKR 8 to PKR 8.50 per litre, subject to a final exchange rate adjustment in pricing, from the current rate of PKR 282.24 per litre at the depot stage.

For the purpose of price calculations, officials said the petrol price had gone up by about USD 4 per barrel to USD 98.5 last week, while the HSD price went up by USD 4.50 per barrel to USD 102.9.

Nearly two weeks ago, the government implemented a price hike of PKR 9.66 per litre for petrol and a reduction of PKR 3.32 per litre for high-speed diesel (HSD), effective until April 15.

The government has also reached the maximum permissible limit of PKR 60 per litre in petroleum levy, as mandated by law, for both petrol and HSD.

Under the commitments made with the International Monetary Fund, the government had set a budget target to collect PKR 869bn as a petroleum levy on petroleum products during the current fiscal year. It has already collected about PKR 475bn in the first half (July-December) of the fiscal year, though the government is expected to mop up about PKR 970bn by the end of the year, despite the revised target of PKR 920bn by the end of June.

Currently, the government is charging about PKR 82 per litre in taxes on both petrol and HSD.