ISLAMABAD - While announcing the last revision of its tenure, the federal government has increased the prices of Petrol and High Speed Diesel by Rs 19.95/litre and 19.90/litre respectively for the first fortnightly of August. Under the biweekly price adjustment mechanism, the review was due on Monday (July 31), however, the government was reluctant, owing to upward trends in the international oil market and depreciation of Pakistani rupee against the US dollar, and, therefore, delayed the announcement for one day till August 1, 2023.
In his short televised address on Tuesday morning, Finance Minister Ishaq Dar announced the massive hike taking the price of Petrol to Rs272.95/litre and High Speed Diesel to Rs 273.40/litre.
While explaining the reasons behind the delay in the announcement of the revised oil prices, the finance minister said the basic reason was that they were looking at if there were ways to reduce the proposed increase. The government had checked the working of Oil and Gas Regulatory Authority (OGRA) until the late Monday night.
The minister said that the price of high speed diesel (HSD) and petrol had increased over the last 15 days in the international market.
In the current fortnight, petroleum products prices in the international market have increased substantially. Petrol price has increased from $89.14 per barrel on 16th July 2023 to $97.39 on 31st July 2023, whereas, High Speed Diesel price has increased from $96.26 to $111.46 per barrel.
Ishaq Dar said that the matter was then discussed with Prime Minister Shehbaz Sharif earlier Tuesday.
“We all know that we have international commitments with the International Monetary Fund (IMF) regarding the petroleum development levy, if they weren’t there then we would’ve announced a smaller hike,” Ishaq Dar said and added that “We are in IMF programme, everyone knows we have a standby agreement.” If you remember, the problem in the previous government tenure was that they didn’t fulfil their international commitments with IMF on Petroleum Levy and had reduced it at the time of their departure, he recalled.
“So in the country’s interest, it is necessary that the minimum calculated hike be passed on to the consumers. HSD is being increased by Rs19.90/litre and the new price will be Rs273.40/litre. And petrol price is being increased by Rs19.95/litre to Rs272.95/litre,” Dar said.
“However, international prices are not in the government’s control. And as I said, we did the working to the last penny to reduce the increase in the prices,” he said.
Meanwhile, Finance Division in a statement said that the cost of petroleum products in Pakistan is directly linked to the international prices of these products. Therefore, the increase in domestic prices is inevitable and beyond the control of the Government of Pakistan, the statement said.
As per the official documents, the government didn’t change GST and PL on both the products for the next fortnightly. The GST will remain zero, while PL will remain at Rs 55/litre till August 15.