KARACHI: The government is likely to jack up the price of petroleum products by Rs10-14 per litre for the next fortnight due to rising oil prices in global markets, The News reported citing sources. 

The price hike comes as another shock for the inflation-hit people amid the already worsening financial crises in the country. 

The expected price hike may even reach Rs14 per litre if the government also adjusts the exchange rate losses, unlike the previous review when the centre didn’t pass on the impact of rupee devaluation.

The current ex-depot price of petrol is Rs272 per litre, which may go up to Rs286.77 per litre if the government decides to pass on the impact of global oil prices and exchange rate losses.

Even though the government skips adjusting the exchange losses, the petrol price would still face an increase because of higher oil prices in global markets. The expected hike in the price of petrol is based on the present rate of taxes.

The government is charging an Rs50 per litre levy on petrol with zero general sales tax.

The expected rise in the price of petrol is based on an Rs5 per litre exchange loss adjustment of Pakistan State Oil (PSO), which is due to the government as it didn’t include the exchange rate adjustments in the past to keep the prices of the petrol on the lower side.

The POL prices would have been on the higher side after a massive depreciation of the rupee against the dollar in the last two and half months when under International Monetary Fund (IMF) conditions, the market-based exchange rate was allowed.

Diesel price expected to remain unchanged

On the other hand, the price of high-speed diesel (HSD) is likely to remain unchanged in the next review of prices as the current ex-depot price of HSD is also the same compared to the working for the next fortnightly price of diesel.

The next review of the HSD price is based on the Rs17.50 exchange loss adjustment of PSO, which was also pending when the dollar price shoot up massively in the last several weeks.

“The diesel price may come down by Rs15 per litre if the government doesn’t adjust the exchange rate loss”, the sources said.

The government raised the petroleum levy on HSD to Rs50 per litre under IMF conditions in the last review of prices and charged no GST on it.

Sources said that in the present scenario, the government has no option but to raise the price of petrol as its financial space is already squeezed.

Also, the government is making desperate efforts to revive the IMF programme to shore up the forex reserves.