OGRA hiked HSD and petrol prices from March 1. PHOTO: PEXELS
ISLAMABAD:
The recent rise in oil product prices has been attributed to the expiry of a temporary oil tax concession Prime Minister Shehbaz Sharif had secured from the International Monetary Fund (IMF) amid heightened tensions between Iran and the United States, according to senior government sources.
The sources said that during the Gulf crisis triggered by the confrontation between Iran and the US, Prime Minister Shehbaz personally approached the IMF managing director and sought exemption from the oil tax to protect consumers from a sharp rise in fuel prices.
According to the sources, the Prime Minister’s special efforts resulted in the IMF granting Pakistan a two-month oil tax relaxation, which enabled the government to avoid passing on the full burden of higher fuel costs to consumers during that period.
However, the two-month concession has now expired, requiring the government to restore the oil tax in line with its commitments under the IMF programme.
The sources said that after the expiry of the temporary relief, the government had to increase the oil tax on petroleum products, which consequently led to the recent hike in fuel prices.
The government on Friday announced higher prices for petroleum products, including an increase in the oil tax on gasoline, with officials maintaining that the adjustment became necessary after the expiration of the IMF-approved concession.
The increase in the tax comes as Pakistan continues to implement revenue measures agreed with the IMF under its ongoing economic reform program, with the oil tax remaining a major source of government revenue.
Jet fuel
The government has increased the price of jet fuel used by commercial airlines by Rs 13.23 per liter following a rise in international oil prices, while raising the price of kerosene and increasing the oil tax on petrol.
According to sources, the price of aviation turbine fuel (jet fuel) has been increased by Rs13.23 per litre, bringing the new price to Rs251.02 per litre.
Sources said the increase was necessitated by a sudden rise in global crude oil prices, which pushed up the cost of jet fuel.
The revised price is expected to increase fuel costs for commercial airlines, as jet fuel is one of the main components of airlines’ operating expenses.
Meanwhile, the government has also hiked the price of kerosene by Rs 11.19 per litre.
After the hike, the new price of kerosene has been fixed at Rs 242.33. per liter compared to the previous rate of Rs 231.14. per litres.
Sources further said that the government has also increased oil tax on petrol by Rs9.64 per litre.
With the latest hike, oil tax on petrol has again reached Rs 80 per litre, up from the earlier rate of Rs 70.36 per litre, according to sources.
