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Petrol prices dropped, but taxes increased by Rs 5 per Litre in March


Muhammad UsmanMultimedia Journalist

03rd Mar, 2020. 08:17 pm
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Petrol price increased

Petrol prices in Pakistan dropped by Rs 5 amid decline in international oil prices by government of Pakistan but at the same time taxes on petroleum products have been increased by 5% i.e. Rs. 4.7 per litre.

In February, per litre price of petrol was Rs 116.6 which included Rs. 32 in government taxes. In March per litre price of petrol is Rs. 111.6 which includes Rs 36 in government taxes as government has increased petroleum levy

The price structure of petroleum product is different and unlike other commodities the petrol prices are regulated by the government. The government on the advice of OGRA sets the price of petroleum products based on international oil prices. OGRA calculates the prices and recommends to the cabinet for approval. The cabinet then decides to increase or decrease the price.

The petrol you are purchasing today was imported weeks ago in advance, the increase or decrease in price corresponds to whether international oil prices rose or fell.

The price of Oil in international market fell from $72.6 per barrel in the first week of January to $52 a barrel on February 28, this is why the government has reduced the price of petroleum products in its latest review. The price per barrel of crude oil fell by $20.

As per OGRA’s calculation a litre of petrol now costs Rs 9 less than previous month. The government should have reduced the price of petrol by Rs 9, but this is not the case as government has increased the petroleum levy by Rs 4.7.

Petrol Levy

The government has passed only 50% of the benefit of the the price reduction in international markets to end consumers.

It means although government has reduced the price of petrol by Rs. 5 but you are paying 5% more taxes.

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