The government is considering a huge increase in the price of petrol by Rs 10 per liter starting from April 1.
If the government decides to adhere to the IMF’s condition of raising the GST ratio, then the price of petrol per liter could soar by Rs 50.
Media reports suggest that even without factoring in the GST increase, the price of petrol is set to rise by 10 rupees per liter due to two primary factors. First, the premium on petrol has surged from $12.15 per barrel to $13.50, marking a $1.45 increase per barrel. Secondly, the inland freight margin is also slated for an increase. Consequently, the price of petrol may jump from 279.75 rupees to 289.75 rupees per liter.
On a contrasting note, the price of high-speed diesel is expected to decrease by Rs 1.30, while the prices of kerosene and light diesel are likely to remain stable at 188.66 and 168.18 rupees per liter, respectively.
According to reports, if the government opts to apply an 18% GST on petrol, its price could skyrocket to Rs 50 per liter. The IMF has purportedly urged Pakistan to raise the petrol GST to 18%.
It’s worth noting that starting from 2022, the GST rate on petrol is zero percent, meaning GST is not levied. However, the government does collect a petroleum development levy at the rate of 60 rupees per liter, alongside import duties.
Should the government agree to implement the GST hike, the price of petrol could surge by Rs 50, and diesel could see an increase of Rs 53 per liter.
On March 31, OGRA is expected to publish updated pricing and submit a summary of the new petroleum prices to the government.
