Oil Prices in Pakistan Cheapest in South Asia
PM Khan tweeted on the reduction in the prices of petrol, light diesel oil and kerosene oil, stating that Pakistan now has the cheapest fuel in South Asia.
Prime Minister Imran Khan tweeted on the reduction in the prices of petrol, light diesel oil and kerosene oil, stating that Pakistan now has the cheapest fuel in comparison to other nations in South Asia.
We have further reduced petrol, light diesel oil, kerosine oil prices. Now we have the cheapest fuel cost compared to other states in South Asia. India is almost exactly double. Bangladesh, Sri Lanka & Nepal are all 50 to 75 percent more expensive than us. pic.twitter.com/oD9wVMcZno
— Imran Khan (@ImranKhanPTI) May 31, 2020
The federal government has announced that the petrol price in Pakistan have been reduced by Rs 7.06 – from Rs 81.58 to Rs 74.52 per litre. This fuel is mainly used in vehicles. However, based on the existing tax rates and the PSO’s import cost, the petrol price should have come down by Rs 13.30 per litre.
High Speed Diesel (HSD) price has increased by Rs 0.05 – from Rs 80.10 to Rs 80.15 per litre. It should be noted that while HSD is used in transport and agriculture sectors, the change is too small to actually impact inflation. But the total amount of tax and levy now stands at about Rs 41.65 per litre, making this more than double of the actual cost of diesel.
Kerosene oil’s price in Pakistan has declined this June, just like the petrol prices – from Rs 47.44 to Rs 35.56 per litre. This oil is used for cooking, especially in areas where liquefied petroleum gas (LPG) or pipeline gas is unavailable. The sales for kerosene oil are generally less than 11,000 tonnes per month.
Lastly, Light Diesel Oil (LDO) has decreased by Rs 9.37 for June – from Rs 47.51 to Rs 38.14. LDO is generally used by flour mills and a couple of power plants, and could possibly impact these sectors if it remains a stable change.
Federal government had announced the change in the General Sales Tax (GST), making it an even 17% for all the petroleum products. Until the January of 2019, the government had been charging 0.5% GST on LDO, 2% on kerosene, 8% on petrol and 13% on HSD.
While the changes may make Pakistan’s oil prices the cheapest oil prices in South Asia, only its implementation and impact on the sectors and industries will tell us if it good for the general public or not.
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