Islamabad: Pakistan government has increased the petrol prices at a time when oil prices in the international market have declined.
The price of petrol has been spiked by Rs6.72 per litre under its fortnightly fuel price adjustment mechanism, said a statement by the finance division. “In the wake of the fluctuations in petroleum prices in the international market and exchange rate variations, the government has decided to revise the existing prices of petroleum products to pass on the impact to the consumers,” the finance division said in its statement.
The price of petrol was raised to Rs233.91 from Rs227.19, indicating an increase of Rs6.72 per litre. The price of high-speed diesel (HSD) has been slightly reduced by 51 paisas and fixed at Rs244.44 for the next fortnight. The light diesel oil now costs Rs191.75 and the kerosene oil Rs199.40. The new prices will come into effect from August 16, 2022.
The decision was widely criticised by the public who objected that the petrol prices have been increased at a time when oil prices continue to fall globally and when Pakistanis are enduring 13-year high inflation. Oil prices plummeted below $90 a barrel for the first time since the war in Ukraine began in late February.
Responding to critical replies on Twitter, Finance Minister, Miftah Ismail explained the reasons behind the increase in prices of petroleum products in Pakistan and how petrol and diesel prices are fixed in the country.
The finance minister said that the Oil and Gas Regulatory Authority (OGRA) takes the average of Platt (oil industry average) prices and first adds freight and premium charges paid by the Pakistan State Oil (PSO) to the Platt average and then multiplies it by the exchange rate.
“In addition, it also trues up the previous fortnight’s cost by taking into account the rupees paid by PSO at the actual exchange rate as opposed to the average used to estimate the previous fortnight’s cost”, he said. “We have not added any new tax or levy to the price. The price of petrol has gone up and diesel has gone down because the cost paid by PSO in the previous fortnight was more than the cost estimated by OGRA and also because the premium paid by PSO on petrol increased and the premium paid on diesel remained unchanged,” he added.
On August 1, Pakistan’s coalition government reduced petrol prices by Rs3 per litre for the first time since the PMLN-led coalition government came to power in the second week of April. The price decrease came after the new government increased petrol and diesel prices four times since May 26, leading to high inflation.
