Petrol Price up by Rs 22.20 per liter

Today, the price of petrol in Pakistan has gone up by Rs 22.20 per liter, effective from January 29, 2023.

The government raised petrol prices by Rs 22.20 per liter on Wednesday.

HSD prices increased by Rs 17.20 per liter.

Due to huge rupee devaluation versus dollar, the government raised fuel and diesel prices by Rs 35 per liter by the end of last month.

The finance ministry stated that rupee depreciation against the dollar contributed to fuel and diesel price increases.

Kerosene oil and light diesel oil LDO were also raised by Rs 12.90 and Rs 9.68 per liter, respectively, according to the finance ministry.

Petrol prices increased by Rs 22.60 per liter from Rs 249.80 to Rs 272.

Petrol replaces CNG.

CNG was unavailable due to gas shortages across the country. Punjab CNG stations have used LNG for years due to gas shortages.

Due to worldwide LNG shortages and government firms’ delays, LNG was not available this winter. It powers vehicles and bikes.

Petrol demand soared after CNG outlets closed.

High-speed diesel, used in transport and agriculture, rose to Rs 280 per liter from Rs 262.80 per liter.

The new diesel price hike will further inflate the country’s population. Transport fare increases will raise national product costs.

Kerosene oil would cost Rs 202.73 per liter instead of Rs 189.83.

Kerosene oil is used for cooking in remote Pakistani areas without LPG.
The northern Pakistani army uses kerosene oil.

Light Diesel Oil (LDO) would cost Rs 196.68 per liter, up from Rs 187 per liter.
Industry uses LDOs.

LPG Price

The Oil and Gas Regulatory Authority (OGRA) raised LPG prices by Rs 2 per kilogramme for the remaining 15 days of February 2023.

For the second half of February 2023, the OGRA notice set LPG price at Rs 266/kg, up Rs 2/kg, and raised home cylinder prices by Rs 27 and commercial cylinder prices by Rs 102.

LPG will cost Rs 266/kg, home cylinders Rs 3141.29, and commercial cylinders Rs 12086 on the open market after the OGRA notification on February 15, 2023.

Chairman LPG Association Irfan Khokhar advised all district presidents to protest the LPG price hike, calling it intolerable. He said the government had raised LPG taxes while subsidising imported Liquefied natural Gas with billions of rupees (LNG).

In February 2023, LPG prices rose twice. He added the current LPG price hike is a severe blow to the inflation-hit population, who are already suffering from increasing prices of critical foodstuffs, transportation expenses, and fuel products.

He advised the administration to improve the economy to alleviate the plight of the poor. He also stressed the significance of relief, saying the government should quickly allow the Jamshoro Joint Venture Limited (JJVL) LPG plant to commence production to give the populace some relief. The 32-month closure has cost Rs 157 billion in revenue.

He claimed the country consumes 5000 metric tonnes of LPG daily, whereas JJVL’s LPG plant can produce 550-570 metric tonnes. Khokhar noted that 60% of LPG needs are met by imported LPG due to a growing demand-supply gap.

He noted that individuals who live in isolated highland locations and require LPG for lighting, warmth, or cooking in the absence of alternate fuels find historic LPG prices intolerable.

Earlier, the government made a massive hike in prices of petrol and high-speed diesel (HSD) by Rs 35 per liter.

In a short televised address Sunday morning, the Federal Minister for Finance Ishaq Dar announced hiking the prices of all petroleum products, including Petrol, HSD, Kerosene, and light diesel oil(LDO).

It has been decided to increase the price of petrol and diesel by Rs35/liter, said the minister. The price of kerosene oil and light diesel oil has been increased by Rs18/liter, he announced.

The new prices would come into effect within the next two to three minutes, by 11 am, he added.

After the increase, the price of High Speed Diesel has gone up to Rs 262.80/liter from the previous Rs 225.62.

The price of MS Petrol reached Rs 249.80/liter from the early Rs 214.80/liter. Kerosene Oil has gone to Rs 189.83/liter from the earlier Rs 171.83/liter. The price of Light Diesel Oil has increased to Rs 187/liter from Rs 169/liter.

Ishaq Dar, recalled that during the last four months, from October to Jan 29, the price of petrol was not increased. The prices of diesel and kerosene oil were decreased, he added.

Pakistani rupee depreciated by almost 12pc against the US dollar last week, while the oil prices oil increased by 11pc in the international market.

Despite international prices and rupee devaluation, on directions of Prime Minister Shehbaz Sharif, it has been decided to make a minimum increase in the prices of these four products.

Due to speculation of up to Rs80/liter hike in the prices of Petrol and HSD, petrol pumps across the country stopped selling the fuel on Saturday.

Dar said that the increase is being done immediately on the recommendation of the oil and gas regulatory authority and said there were reports of artificial shortages and hoarding of fuel in anticipation of price rises, hence this price rise is being done immediately to combat the artificial shortage.

The minister hoped that the announcement of new prices would dispel rumors about petrol supplies running dry.

The government resorted to adjustments of Fuel prices three days ahead of the scheduled revision, which was due on January 31, owing to the oil shortage in the country.

There were rumors of a hefty hike in oil prices for the next fortnight, the petrol pumps have started hoarding and an artificial shortage was created, where more than 80pc petrol pumps were closed in some regions of the country.

The new prices will be effective till February 15, 2023.

The government has decided to maintain the price of petrol and diesel for the next fortnight effective from January 16, 2023.

Finance Ministry in a statement said that the government had decided to keep prices of petroleum products unchanged from January 16 to January 31, 2023.

Meanwhile, Finance Minister Ishaq Dar in a press conference held in Lahore announced to maintain the existing oil prices remain effective for the second fortnight of January.

According to the statement of the Finance Ministry, the government had maintained the existing price of petrol at Rs214.80 per liter, Diesel at Rs227.80 per liter, Kerosene oil at Rs171.83 per liter, and light diesel oil (LDO) at Rs169 per liter.

Petrol is used in motorbikes and cars and is an alternative to CNG.

Punjab province has been using LNG for the last several years due to a shortage of indigenous gas.

However, LNG has not been available in Punjab province during the current winter season as state-owned companies failed to import LNG due to its higher prices in the global market in wake of Russia Ukraine war.

Therefore, its use has increased due to the shortage of gas for CNG retail outlets.

Meanwhile, high-speed diesel is widely used in the agriculture and transport sectors.

Kerosene oil is used in remote areas of Pakistan where LPG was not available for cooking purposes.

Pakistan army was its key user in the northern part of Pakistan.

So, the consumers will have some relief due to the decision of the government to keep oil prices unchanged despite the fact there could be an increase due to fluctuation in global oil prices and depreciation of the currency against the dollar.

The price of petrol was likely to go up by Rs8.98 per liter and the price of high-speed diesel (HSD) by Rs1.06 per liter in the fortnightly revision of petroleum product prices.

Earlier, the government had also decided to leave the prices of petrol and high-speed diesel (HSD) unchanged at their current levels for the first half of January 2023.

The finance minister Senator Ishaq Dar has expressed gratitude to the prime minister for taking this decision. 

The current price of HSD is Rs227.80 per liter and petrol is 214.80 per liter.

The current price of kerosene is Rs 171.83 per liter and Light diesel oil (LDO) is Rs 169 per liter.

High-speed diesel is widely used in the agriculture and transport sectors.

Kerosene is used for cooking purposes mainly in areas where LPG was not available for cooking.

Pakistan army is its main user in the northern part of Pakistan.

These prices will also remain the same up to January 15, 2023.

The minister in his televised address to the nation at state-run electronic media highlighted that the oil prices were on the rise at the international markets and informed about the calculations made by Oil and Gas Regulatory Authority (Ogra) in this regard.

The minister said that Ogra had calculated an increase of Rs8.76 per liter in the price of kerosene oil to Rs180.59 per liter from the existing rate of Rs171.83.

Similarly, for the light diesel oil (LDO) Ogra suggested an increase of Rs7.96 to Rs176.73 per liter.

“The prime minister has taken this decision to maintain the oil prices in wake of extreme cold as people use kerosene oil as fuel for heating and cooking,” Senator Dar added.

The minister said that the price differential will be adjusted in the petroleum levy (PL) by the government, suggesting that revenue collections at oil products would be less in the first fortnight of January 2023. 

On the other hand, oil products have witnessed a declining trend in the country and it will be witnessed in the month of January too, industry sources said.

“Diesel sale in December 2022 was 510,000 tonnes, whereas the same was around 610,000 tonnes in December 2021, similarly petrol consumption too declined by around 100,000 tonnes to around 630,000 tonnes in December 2022,” a senior official of the petroleum industry said.

He added that this decline has two main reasons reduction in consumption due to high rates, and increased smuggling from Iran – that too because of the price differential.

Currently, the PL at one liter of petrol has reached its upper cap of Rs50, while it was Rs35 at each liter of HSD sold, leaving space for the government to increase the levy and keep the prices unchanged.

Apart from the international oil rates, the serious impact faced by the oil marketing companies (OMC) in Pakistan was the fluctuating exchange rate.

The largest oil importer in the country is the state-owned OMC Pakistan State Oil (PSO), and it was facing a huge rupee-dollar exchange loss on the imports of petroleum products, and as the petroleum prices are kept unchanged the OMCs cannot recover the amount from the customers, thus creating a huge backlog to be paid by the government.

Earlier, the government had reduced the price of petrol by Rs. 10 per liter to take effect on December 16, 2022.

The government has lowered the cost of high-speed diesel by Rs 7.50 a liter, according to a tweet from Finance Minister Ishaq Dar.

Petrol prices were reduced by Rs 10 per liter by the government.

Both kerosene and light diesel oil (LDO) were now 10 rupees per liter less expensive.

High speed diesel will be supplied at Rs 227.80 per liter as a result of price reductions for petroleum products.

Following a price cut, fuel will be offered for Rs 214.80 for a liter.

The price per liter for kerosene oil is Rs 171.83. Light diesel oil now only costs Rs 169 per liter.

Ishaq Dar, the finance minister, announced price reductions for high-speed diesel (HSD), petrol, kerosene, and light diesel oil (LDO) at a news conference. HSD was reduced by Rs7.5, LDO by Rs10, and petrol by Rs10.

According to him, HSD would now cost Rs227.80 per liter, petrol Rs214.80, kerosene oil Rs171.83 per liter, and LDO Rs169 per liter.

Dar said that the revised pricing would take effect at midnight tonight.

Calculations predicted a reduction in high speed diesel prices of Rs12.37 per liter for the second half of December 2022.

The government has pledged to the International Monetary Fund (IMF) that it will apply general sales tax (GST) on petroleum products once they have reached the PL maximum of Rs. 50 per liter.

A PL of Rs. 50 per liter for gasoline, Rs. 25 for HSD, Rs. 7.01 for SKO, and Rs. 15.39 for LDO are being levied by the government. But the government has pledged to the international lender that it will raise the PL on HSD to Rs. 50 by April 2023.

Contrary to expectations, the government decreased the cost of high-speed diesel by only Rs 7.50 per liter.

In the transportation and agricultural industries, high speed diesel is frequently used. In light of this, the partial price drop on high-speed diesel was also a huge comfort for the transportation and agricultural industries, which would have an inflationary effect on people’s daily life.

As an alternative to CNG, gasoline is utilized in vehicles and motorcycles.

The LNG that has been used by the CNG stations in Punjab province to run during the current season is imported. In light of this, December will see a rise in the demand for gasoline.

In distant areas of Pakistan, particularly in the north, where LPG or pipe gas was not available for cooking purposes, kerosene oil is utilised as a fuel.

In the country’s north, the Pakistani army is one of the main consumers of kerosene.

The industry uses LDO.

Earlier, Finance minister Ishaq Dar had announced keeping prices of diesel unchanged to deprive consumers of major relief effective from December 1, 2022.

The price of diesel was supposed to be reduced by Rs 11.95 per liter.

However, the government kept its price unchanged in a bid to raise the rate of petroleum levy (PL) to collect more revenue from oil consumers.

However, the price of petrol was to go up but the government decided to keep its price unchanged.

The finance minister Ishaq Dar announced to cut the price of kerosene oil by Rs 10 per liter and Light Diesel Oil (LDO) by Rs 7.50 per liter.

The government had already increased the rate of petroleum levy on petrol and HOBC to the budgeted level of Rs 50 per liter.

Now, it had a space to increase the rate of petroleum levy on diesel and kept its price unchanged to increase the rate of petroleum levy.

Diesel is a key product and is widely used in the transport and agriculture sectors.

The revision in its price has a direct impact on the life of the masses.

After the recent decision, the current price of diesel would continue at Rs 235.30 per liter.

Kerosene oil is used in remote areas of Pakistan for cooking purposes where pipeline gas or LPG was not available. Pakistan’s army also uses kerosene oil.

The price of kerosene oil had come down from Rs 191.83 per liter to Rs 181.83 per liter and LDO Rs 186.50 to Rs 179 per liter.

The price of petrol has witnessed an increase of Rs 2.62 per liter which could go up to Rs 227.42 per liter from the existing Rs 224.80 per liter.

However, the government decided to maintain its existing price for the next two weeks.

Petrol is used by motorbikes and cars and is an alternative to CNG. 

The government has decided to maintain the price of petrol in Pakistan from November 16, 2022.

Finance Minister Ishaq Dar announced this through a video statement.

Petrol is a fuel used in cars and motorcycles to travel on roads.

The government of Pakistan revises the price of petrol after every two weeks.

Today Price of Petrol in Pakistan

JP-1 Rs 214 per liter

Prices of petrol have been mattering of concern for consumers.

A few countries have a monopoly over the prices of petroleum products and therefore they control prices in the global market.

Pakistan is a net importer of petroleum products. Around 85 percent of petroleum products are imported to meet the local demand of consumers.

Revision in oil prices

Historically, consumers in Pakistan have been facing revisions in oil prices on a monthly basis.

However, whenever, the prices of petroleum products start rising in the global market, the local oil industry builds pressure on the government to switch oil prices revision from monthly to fortnightly.

Before Russia Ukraine war, the government in Pakistan had been revising the prices of petrol on monthly basis.

When the war led to spike prices of petrol globally, the oil industry built pressure on the government to review the oil prices mechanism.

So, the government changed the oil prices review mechanism from a monthly to a fortnightly basis. At present, oil prices are reviewed after every two weeks.

This mechanism helps the oil industry to reap benefits on account of inventory gains after every week due to the rise in the price of petrol in Pakistan.

Who regulates Petrol Prices Today?

The oil and Gas Regulatory Authority (Ogra) regulates oil prices in Pakistan.

According to policy, the price of petroleum products is deregulated and Ogra regulates only the price of kerosene.

However, the government regulates the prices due to the involvement of margins on petroleum products and other taxes. So, we can be called it ‘controlled deregulation of petroleum prices in Pakistan.Furnace Oil Prices in Pakistan down up to Rs 15,000 per ton

Oil Prices Formula

The consumers pay ex-refinery and ex-depot prices. In addition to these, the government charges general sales tax and petroleum levy on petroleum products. 

• Ex-depot price
• Margins of OMCs and Dealers
• General Sales Tax
• Petroleum Levy
• These are four principles, ogra follows to determine the price of petrol in Pakistan today.

Oil Market Players

At present, there are several oil marketing companies that market product of petrol in Pakistan.

However, Pakistan State Oil (PSO) is a key player that markets the product of petrol.

It lifts product of petrol from the local market.

In addition, it has a supply agreement with Kuwait Petroleum Corporation (KPC) to import petrol.

PSO also imports cargoes of petrol on a spot purchase basis to meet its demand in Pakistan.

Oil Refineries

Oil refineries are also big players in Pakistan to supply petrol to oil marketing companies.

OMCs supply products to dealers to sell to consumers.

At present, there are five refineries in Pakistan.

• Pak Arab Refinery Limited (Parco)
• Attock Refinery Limited (ARL)
• National Refinery Limited (NRL)
• Pakistan Refinery Limited (PRL)
• Byco Refinery

Parco, Attock Refinery and Byco have also their oil marketing companies.