Petrol Prices in Pakistan: Budget Burden Looms
The upcoming budget is expected to have a significant impact on petrol prices in Pakistan, with the petroleum levy increase likely to offset a revenue shortfall of Rs700 billion. The prices of petrol and diesel may remain unchanged or drop slightly, while kerosene and light diesel oil prices are expected to rise.
Senator Saleem Mandviwalla has expressed concerns that the upcoming budget will increase the petroleum levy, further burdening the public, while petrol and diesel prices may remain unchanged or drop slightly from June 1.
The Senate standing committee on finance and revenue chairman criticized the Federal Board of Revenue's performance, particularly with regards to the Tajir Dost Scheme, which aims to bring traders and wholesalers into the formal tax structure. Mandviwalla emphasized the need for technological advancements in the taxation system, citing examples of Turkey and India. The petroleum levy is expected to be increased to offset a revenue shortfall of Rs700 billion.
The price of petrol could decrease by Rs0.60 per liter and high-speed diesel by Rs0.28 per liter, but the final decision awaits the finance ministry's input. However, kerosene oil price may increase by Rs0.30 per liter to Rs164.96, and light diesel oil price by Rs1.30 per liter. Brent crude oil prices have been hovering around $64 per barrel, influenced by US data and OPEC+ talks.
A working paper on petroleum prices submitted by the oil industry to the Oil and Gas Regulatory Authority (OGRA) suggests that petrol prices may decrease by Rs. 0.61 per litre, while high-speed diesel prices may drop by Rs. 0.28 per litre. In contrast, kerosene prices are expected to increase by Rs. 0.21 per litre, and light diesel oil prices may rise by Rs. 1.30 per litre.
The final decision on petroleum product prices will be made in consultation with the Prime Minister, with the Ministry of Finance issuing an official notification after approval. The government is expected to announce a minor revision in petroleum product prices from June 1, following fluctuations in global oil prices.