Petrol Prices in Pakistan May Get Huge Increase For Fortnight

The Federal Government is mulling to increase petrol prices in Pakistan by Rs. 20 per litre for the upcoming fortnight starting 16 February 2023 keeping in view the change in price of crude oil in the international market.

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According to the details, the hike in the petrol prices in Pakistan is calculated based on the price of petroleum products in the international market, but many people are worried as the coalition government already hike the price of petroleum products last month.

In the last review, the federal government increased petrol prices in Pakistan by Rs. 35 per litre with petroleum levy (PL) standing at Rs. 50, while there is 0% General Sales Tax (GST) on petroleum products.

However, the International Monetary Fund (IMF) has demanded implementation of GST on all petroleum products for resumption of the loan programme. If the coalition government goes through with the demand, we can expect 17% GST to be added to the current price of petroleum products.

Furthermore, it is expected that petrol prices in Pakistan will be adjusted to account for the change in the foreign exchange rate as Pakistani Rupee (PKR) has depreciated significantly during the last few weeks.

It means that despite the drop in price of diesel in the international market, the price of the commodity in Pakistan will rise due to devaluation of the local currency. However, we are going to have to wait till tomorrow to see what the government announces as new petrol prices in Pakistan will become applicable from 16 February 2023.