Govt unlikely to pass on price relief due to PSO’s exchange loss adjustment

Tanveer Malik
Saturday, Oct 29, 2022

KARACHI: The exchange loss adjustment of Pakistan State Oil (PSO) would

likely deprive consumers of major relief in prices of petroleum products in the next fortnight.

According to the data of the oil industry, falling international prices of oil products have reduced the ex-refinery prices of diesel and petrol for the next fortnight.

Price of crude oil averaged $92 per barrel, whereas petrol and diesel averaged $86

and $130 per barrel, respectively.

However, the adjustment loss of PSO, which has been pending since the last two and a half months, might not pass on the full impact of the falling global prices of crude and petroleum products.

The working of oil industry on the basis of current government taxation on the

petroleum products as well the exchange loss adjustment of PSO indicated that price

of petrol might fall by Rs2.86 per litre to Rs221.94 per litre in the next fortnight, from existing price of Rs224.80 per litre

The price of diesel would likely go up by Rs3.70 per litre to Rs239.00 per litre in the

upcoming fortnight, from the current price of Rs235.30 per litre

However, the price of light diesel could fall by Rs4.23 per litre to Rs182.27 per litre in the next fortnight, from the existing Rs186.50 per litre. Kerosene price would likely go up by Rs0.29 per litre to stand at Rs192.12 per litre in a fortnight from the present Rs191.83 per litre.

In the next fortnight, an estimated exchange loss adjustment of PSO comes to Rs6 per litre on petrol and Rs5 per litre on diesel.

If the government does not adjust the PSO’s exchange loss, the price of petrol might fall by around Rs9 per litre while diesel could decline by around Rs1.50 against a hike in its price.

For the next fortnight, the ex-refinery prices have been calculated on the exchange rate of Rs.220.58 against the exchange rate of Rs.221.02.

Current petroleum levy remains very high with the government charging Rs47.26 per litre on petrol and Rs7.14 per litre on diesel.

Government has imposed a petroleum levy on petroleum products under the agreement with the International Monetary Fund (IMF) as it has to charge Rs50 per litre levy on diesel and petrol to raise the additional revenue as per deal with the global financial institution.