Fuel prices have risen as the price of crude oil is used to manufacture gasoline and diesel. Due to global isolation at the start of the pandemic, there was a drastic decline in demand for fuel and energy. Less need to travel and increasing ‘work from home rules,’ along with many people losing their employment, resulted in a substantial fall in energy demand.
The Reason for the Drastic Impact on Fuel Prices and Import
As the pandemic ended, the energy demand grew once more as people worldwide sought to resume their prior lives. With the growing energy demand, suppliers are failing to meet demand, increasing fuel prices. The question still stands; Why do gasoline prices fluctuate?
What Makes Fuel Prices in Pakistan Fluctuate?
Petrol prices often fluctuate in tandem with the price of crude oil. Despite this, if crude oil prices fall, it does not necessarily follow that petrol providers will lower the price of their goods to reflect this. Crude oil prices have often fallen marginally, and petrol producers have been accused of failing to reflect this in their fuel pricing.
Furthermore, as the worldwide market stabilizes, fuel businesses may delay changing their prices to offset their losses from the pandemic.
Many businesses lost money during the Covid-19 period, despite their supply remaining constant due to a lack of global mobility. Now that travel to most countries is permitted again, fuel corporations are eager to recoup some of their losses, and so the rising fuel prices are unlikely to be cut anytime soon, prompting more individuals to turn to hasty short-term loans to fund their monthly fuel and living bills.
Recent Update on Fuel Prices in Pakistan
Based on current tax rates, the ex-depot price of petrol is expected to fall by Rs10.75 per litre to around Rs214. In contrast, the price of HSD is likely to rise by Rs11.50 a litre to around Rs247. Similarly, prices of kerosene and light diesel oil (LDO) are expected to increase by Rs4.50 and Rs7.50 per litre, respectively, to around Rs196 and Rs194 per litre.
The benchmark international crude prices had fallen in recent weeks. Still, due to refining capacity constraints, refining margins and premiums on HSD had climbed simultaneously, resulting in a higher cost impact on HSD imports to Pakistan.
Explore About the GST Included in the Quoted Price
Currently, the GST on all important items, including petrol, HSD, kerosene, and LDO, is nil, unlike the typical GST of 17.5%. However, the government levies a petroleum fee of Rs32.42 per litre on petrol, Rs12.58 per litre on HSD, Rs15 on kerosene, Rs10 on LDO, and Rs30 per litre on High Octane Blending Component. The government also levies a customs fee of around Rs22 per litre on petrol and HSD.
Under the IMF program, the government committed monthly PDL hikes of Rs5 for both fuels – petrol and high-speed diesel – until it reaches Rs50 in January for petrol and April for diesel, to collect Rs855 billion throughout the current fiscal year. Given the considerable decline in POL consumption caused by the economic slump and floods, the aim suddenly appeared challenging to meet.
Conclusion:
JINN petroleum has made it possible to supply Oil and gas all over Pakistan through its quality service. JPPL is the best petroleum provider in Pakistan. There are also many opportunities created for people wanting to invest in the petroleum industry in Pakistan.
