Government raises petrol price by Rs2.73 per litre

On Thursday night, the caretaker government announced an increase in the price of petrol by Rs2.73 per litre for the next fortnight.

According to a notification from the Finance Division, the new price of petrol stands at Rs275.62 per litre, up from the previous Rs272.89.

Additionally, the price of high-speed diesel (HSD) saw a significant hike of Rs8.37, bringing it to Rs287.33 per litre.

In a late-night announcement, the Ministry of Finance stated that the government has decided to adjust the prices of petroleum products for the fortnight starting from February 16, following recommendations from the Oil and Gas Regulatory Authority (Ogra).

However, the notification did not mention any changes in the prices of kerosene oil and light diesel oil.

Officials explained that the prices of petrol and HSD were anticipated to rise by Rs4-11 per litre for the next fortnight due to increased international prices and import premiums, offsetting the impact of a minor exchange rate gain.

Over the last two weeks, the price of petrol rose by about $1.20 per barrel to $89.9, while HSD became costlier by approximately $3.5 per barrel, reaching $101.82.

Meanwhile, the rupee gained about 40 paise against the dollar, standing at Rs279.7 compared to a little over Rs280 in the first half of February. However, the premium paid by Pakistan State Oil for securing product cargoes slightly increased for petrol from $9.5 to $9.7 per barrel, remaining unchanged for HSD at $6.5 per barrel.

The government has already reached the maximum permissible limit of Rs60 per litre for petroleum levy on both petrol and HSD. It had set a budget target of collecting Rs869 billion as petroleum levy during the current fiscal year under IMF commitments, having already collected about Rs475 billion in the first half (July-December), despite gradually increasing the per litre levy.

Currently, the government imposes about Rs82 per litre tax on both petrol and HSD. Although the general sales tax (GST) is zero on all petroleum products, the government charges Rs60 per litre Petroleum Development Levy (PDL) on both products. Additionally, it imposes Rs50 per litre on high octane blending components and 95RON petrol.

Petrol and HSD contribute significantly to government revenue, with monthly sales of about 700,000-800,000 tonnes per month, in contrast to just 10,000 tonnes of kerosene.

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