ISLAMABAD: Pakistan may surprise in next revision of petroleum prices scheduled on December 31, 2022 amid political uncertainty and mounting inflationary pressure.
Experts believed that the government may resort to another sharp cut in prices of petroleum products as part of popular decision and cool down the high prices.
Although the prices of benchmark Brent crude oil recorded an increase international market during past week and reached to $83 per barrel but still recorded a significant decline when compared with $130 in March 2022.
The country in its last revision on December 15, 2022 sharply cut the prices of petroleum products effective from December 16, 2022.
Finance Minister Ishaq Dar in a message announced the prices for next fortnight. According to him the high speed diesel price has been reduced by Rs7.5 per liter to Rs227.80.
The price of petrol has been reduced by Rs10 per liter to Rs214.80. The price of kerosene oil has been reduced by Rs10 to Rs171.83. And the price of light diesel oil has been reduced by Rs10 to Rs169.
Experts believed that the government had reduced the prices of petroleum products in the wake of sharp decline in oil prices in global markets.
The experts, however, believed that the government may also keep in mind about the significant fall in rupee value while deciding the prices of petroleum products for next fortnight.
The Pakistani Rupee (PKR) fell over 10 per cent against the US dollar in the current fiscal year. The exchange rate recorded at PKR 204.85 to start the fiscal year on July 01, 2022 and was closed at PKR 225.64 on December 23, 2022.
On the other hand, the inflationary pressure still bothersome for the present government as it continued to surge on the back of high petroleum products and other commodities.
The inflation based on Consumer Price Indicator (CPI) general, increased to 23.8 per cent on year-on-year basis in November 2022 as compared to an increase of 26.6 per cent in the previous month and 11.5 per cent in November 2021.
On month-on-month basis, it increased to 0.8 per cent in November 2022 as compared to an increase of 4.7 per cent in the previous month and an increase of 3.0 per cent in November 2021.
Pakistan is highly dependent on imported fuel to meet domestic demand.
The oil import bill of the country was at $7.7 billion during first five months (July – November) of the current fiscal year, registered a decline of 8.11 per cent when compared with $8.38 billion in the corresponding period of the last fiscal year.
The previous government of PTI had kept both the petroleum levy and sales tax at zero in order to provide relief to the masses. The PTI government also provided a huge subsidy on prices of petroleum products in order to lower the rates and provide relief to the masses.
However, former Prime Minister Imran Khan was removed through a vote of no-confidence motion on April 10, 2022. Since then the new coalition government led by PML-N increased the prices of petroleum products sharply.
The present government in the budget estimated to collect Rs855 billion as petroleum levy during the fiscal year 2022/2023.