ISLAMABAD:
Barely a week after consumers received relief at the pump, the federal government sharply increased oil prices, increasing petrol by Rs 13.18 per liter and high-speed diesel by Rs 13.80 per liter amid a fresh rise in international crude oil prices triggered by rising tensions between Iran and the United States.
The increase follows a further rise in global oil prices following fresh US attacks on Iran and a violation of the July 7-8 ceasefire agreements. Brent crude rose to around $77-$78 per barrel, while US West Texas Intermediate (WTI) was trading at $73.60 per barrel, prompting the government to pass on the higher cost of imports to domestic consumers.
According to a notification issued by the Petroleum Division, the price of high speed diesel (HSD) has been increased by Rs 13.80 per litre, from Rs 309.50 to Rs 323.30 per litre.
Similarly, the price of petrol has increased by Rs 13.18 per litre, from Rs 297.53 to Rs 310.71 per litre.
The government has also increased the tax on petrol from Rs 70.36 to Rs 80 per liter for retail outlets and from Rs 79 to Rs 88.64 for direct sales. The tax on premium HOBC/MS (RON 95) has been increased from Rs 95.36 to Rs 105 per liter for retail outlets and from Rs 97.51 to Rs 107.15 for direct sales.
Petroleum tax on kerosene remains unchanged at Rs 20.36 per litre, while light diesel fuel (LDO) continues to attract a tax of Rs 15.84 per litre. Duty on furnace oil also remains unchanged at Rs 77 per litre, equivalent to Rs 82,077 per metric tonne.
The latest increase comes after the federal government last Friday reduced prices of petrol and high-speed diesel to Rs 1.97 per liter for a week.
High-speed diesel is widely consumed by the transportation and agricultural sectors, and changes in its price have a significant impact on freight rates and inflation.
Gasoline is mainly used in motorcycles and passenger vehicles. Petrol demand has also increased following restrictions on the use of indigenous gas in Punjab.
Kerosene remains an important fuel in remote areas, particularly in the northern regions of the country, where liquefied petroleum gas (LPG) is not available for cooking. It is also a key fuel used by the Pakistan army. Light diesel is mainly consumed in industry.
Meanwhile, Pakistan’s oil industry witnessed a significant drop of up to 20% in sales during June. Industry representatives attributed the decline largely to increased smuggling of petroleum products from Iran.
The general sales tax (GST) on petroleum products remains zero, resulting in revenue losses for provinces.
Sindh has now taken up the issue of the federal government’s dependence on petroleum tax, arguing that unlike the GST, which is shared with the provinces, the tax is retained entirely by the federal government.
