Gasoline remains more expensive despite lower FOB price

KARACHI: Free on board (FOB) petrol prices reflect a drop of Rs 20/litre for consumers during the next fortnightly tariff review, but it is unlikely to be cheaper as the government could stack taxes on these petroleum products as well as adjusting foreign exchange losses, The News learned on Monday.

However, the price of diesel should increase by 1 Re/litre on an FOB basis during the next review. FOB is the price difference of oil prices on the international and domestic market

market. However, the oil industry does not see the decline in the price of gasoline in the next fortnight on an FOB basis.

According to the industry, the government is expected to further increase the Petroleum Tax (PL) on gasoline over the next fortnight, while foreign exchange loss arrears will still be adjusted in oil prices.

“Any decline in the price of gasoline seems unlikely despite a drop in its price on the world market,” say players in the oil sector. They said the price of diesel could see a significant increase in the next fortnight after increasing the PL. Its price could also climb further if the government applies sales tax on its sale, which has been frozen for the past six months.

The oil sector said the government has yet to adjust the exchange loss, which was 23 rupees/litre on petrol and 13 rupees/litre on diesel. They said the average international price for petrol over the fortnight was $103 a barrel, diesel $139 a barrel and crude oil $97 a barrel, while the average exchange rate was $103 a barrel. nearly 217 rupees per litre.

They said consumers were unlikely to benefit from lower prices in the international market, especially for gasoline, and there could be a significant increase in the price of diesel during the next fortnightly review.

According to media reports, the government plans to collect 10.5% GST and Rs 30/litre HGV, in addition to other charges like dealer and distributor markups. The government plans to collect Rs 60 billion in PL and Rs 31 billion in GST per month. The price of petrol is currently Rs233.91/litre, diesel Rs244.44/litre, kerosene Rs199.40/litre and the price of light diesel is Rs191.75/litre.

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