Right when everyone was hoping that the prices of petroleum products would go down, the federal government has done the opposite.
The decision has drawn the ire of citizens who have rejected the increase, arguing that the government should’ve reduced fuel prices after a decrease in crude oil prices in the international market and strengthening of the Pakistani Rupee against the US Dollar.
In this regard, Finance Minister, Miftah Ismail, has taken to Twitter to state how petrol and diesel prices are fixed in the country, explaining to the citizens why the prices of petroleum products went up last night.
1) A brief explanation on how petrol and diesel prices are set in Pakistan. OGRA takes the average of Platt prices, adds freight and premium paid by PSO on top of these prices, and multiplies that by the exchange rate. In addition it also “trues up” the previous fortnight’s cost https://t.co/Nho7dI4vxD
— Miftah Ismail (@MiftahIsmail) August 16, 2022
According to the Finance Minister, the Oil and Gas Regulatory Authority (OGRA) takes the average of Platt (oil industry average) prices. OGRA first adds freight and premium charges paid by the Pakistan State Oil (PSO) to the Platt average and then multiplies it by the exchange rate.
“In addition, it also “trues up” the previous fortnight’s cost by taking into account the rupees paid by PSO at the actual exchange rate as opposed to the average used to estimate the previous fortnight’s cost”, the Minister added.
The price of petrol has increased and diesel has decreased because the cost paid by PSO in the previous fortnight was more than the cost estimated by OGRA as well as the premium paid by PSO on petrol increased and that on diesel remain unchanged, the Minister stated.
The Minister clarified that the government has not imposed any new tax or levy on petroleum products.
Petrol Price Hike
Last night, the federal government announced the revised rates of petroleum products in the wake of fluctuations in petrol prices in the international market and exchange rate variation.
As per the official notification issued by the Finance Division, the price of petrol has been increased by Rs. 6.72 per liter, taking it up to Rs. 233.91 from Rs. 227.19. The price of light diesel oil has increased marginally as well. Its new price is Rs. 199.40.
The per liter prices of diesel and kerosene have noticed a slight decrease of Rs. 0.51 per liter and Rs. 1.67 respectively. The former’s revised price is now Rs. 244.44 while the latter is now priced at Rs. 199.40.
So this formula for petrol prices did not exist when PDM was the opposition? Wow! There seems to be no end to dirty politics in Pakistan.