OGRA increased HSD and gasoline prices effective March 1. PHOTO: PEXELS
ISLAMABAD:
The recent rise in prices of petroleum products has been attributed to the expiration of a temporary concession on oil tax that Prime Minister Shehbaz Sharif had obtained from the International Monetary Fund (IMF) during the intense tensions between Iran and the United States, according to senior government sources.
Sources said that during the Gulf crisis triggered by the confrontation between Iran and the United States, Prime Minister Shehbaz personally contacted the managing director of the IMF and sought relief in oil tax to protect consumers from a sharp rise in fuel prices.
According to sources, the prime minister’s special efforts resulted in the IMF granting Pakistan a two-month relaxation in oil tax, allowing the government to avoid shifting the entire burden of higher fuel costs to consumers during that period.
However, the two-month concession has now expired, requiring the government to reinstate the oil tax in line with its commitments under the IMF programme.
Sources said that after the expiry of temporary relief, the government had to increase tax on petroleum products, which consequently led to the latest increase in fuel prices.
The government on Friday announced higher prices for petroleum products, including an increase in the gasoline tax, with officials maintaining that the adjustment became necessary after the end of the concession approved by the IMF.
The tax increase comes as Pakistan continues to implement revenue measures agreed with the IMF under its ongoing economic reform programme, under which the oil tax remains a major source of government revenue.
jet fuel
The government has increased the price of jet fuel used by commercial airlines by Rs 13.23 per liter following the rise in international oil prices, while increasing the price of kerosene and tax on petrol.
According to sources, the price of aviation turbine fuel (jet fuel) has been increased by Rs 13.23 per litre, taking the new price to Rs 251.02 per litre.
Sources said the increase was necessitated by a sudden rise in global crude oil prices, which raised the cost of jet fuel.
The revised price is expected to increase fuel costs for commercial airlines, as jet fuel is a major component of airline operating expenses.
Meanwhile, the government has also increased the price of kerosene by Rs 11.19 per litre.
Following the increase, the new price of kerosene has been fixed at Rs 242.33 per litre, as against the previous price of Rs 231.14 per litre.
Sources further said that the government has also increased tax on petrol by Rs 9.64 per litre.
With the latest increase, the tax on petrol has once again reached Rs 80 per litre, as against the previous rate of Rs 70.36 per litre, according to sources.
