Petrol price up by Rs24.03, diesel Rs59.16

ISLAMABAD: Federal Finance Minister Miftah Ismail Wednesday announced that the government was not in a position to bear subsidies on petroleum products anymore, therefore, it has decided to increase the prices of petrol by Rs24.03 per litre, taking it to a record high of Rs233.89 per litre.

Starting from June 16, the price of petrol will be Rs233.89 per litre, diesel will be Rs263.31, kerosene oil will be sold for Rs211.43, and the price of light diesel oil will be Rs207.47, the minister announced.

Petrol price was increased by Rs24.03, from Rs209.86 to Rs233.89 per litre, diesel price was increased by whooping Rs59.16 from Rs204.15 to Rs263.31, Kerosene oil price was increased by Rs33.12 per litre, from Rs178.31 to Rs211.43, and light diesel oil price was enhanced by Rs25.53, from Rs181.94 to Rs207.47 per litre.

At the beginning of the press briefing, Miftah — who was flanked by State Minister for Petroleum Musadik Malik — criticised the previous government's policies that, according to him, "deteriorated the country's economy".

"Imran Khan had deliberately reduced the prices of petrol by giving subsidies," Miftah said, adding that the incumbent government was bearing the brunt of those decisions. He said that currently, Pakistan, on every litre, was bearing a loss of Rs24.03 on petrol, Rs59.16 diesel, Rs39.49 kerosene oil, and Rs39.16 on light diesel oil.

He said that in May, this loss had gone past Rs120 billion — three times greater than running the expenses of the civil government, which amounts to Rs40 billion. He claimed that it was a tough decision for the government to save the country from complete economic disaster.

Though the government has zeroed the subsidy on petrol and diesel with a new surge in prices to qualify for the IMF programme's restoration, it has to further increase the price by imposing a petroleum levy by Rs5 per litre of both Mogas and diesel from July 1, 2022, Finance Minister Miftah Ismail told The News.

“And if the price of crude oil or Brent continues increasing in the international market, then prices of both products will also escalate accordingly as the government has to ensure zero subsidies after every fortnight.”

The government took the hard decision to raise the POL prices with zero subsidies to avoid the impending default of the country, he added. The government has already announced mopping up Rs750 billion through petroleum levy on POL products in the next financial year 2022-23. And from July 1, 2022, the government will start imposing Rs5 per litre as petroleum levy. The government has to jack up petroleum levy up to Rs50 per litre to achieve the target of Rs750 billion.

However, the current POL prices in the UK, the UAE, Bangladesh, and India show that BD is the country where the POL prices are the lowest. The price of petrol in BD stands at Rs198.47 per litre and diesel at Rs178.4/litre. In the UAE, the oil-producing countries are selling motor spirit at Rs200.113 per litre and diesel at Rs226.607. However, in India, the price of petrol stands at Rs256.308 per litre, which is higher by 9.58 per cent if compared with the new price of Mogas in Pakistan, which stands at Rs233.89 per litre. However, the price of diesel in India is at Rs237.49 per litre, which is Rs25.8 lower than the price of diesel in Pakistan which stands at Rs 263.31 per litre. In percentage terms, the petrol price in BD is lower by 15.14 per cent than the price of the same product in Pakistan.

Likewise, the price of diesel in BD is also less by 32.24 per cent if compared to the price of diesel in Pakistan. In the UK, the price of petrol is at Rs465.07 per liter, which is far higher by 98.84 percent than the price of petrol in Pakistan. The price of diesel in the UK also stands at Rs481.17 per litre, up by 82.738 per cent more than the price of the same product in Pakistan.

Meanwhile, reacting to the development, PTI leader Fawad Chaudhry took to Twitter and announced that his party had rejected the hike in petroleum products. "We reject this robbery in the middle of the night with all our might," he wrote. "Increase in petrol prices by this much has broken the middle class. People should take part in the protest against this incompetent government."