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The oil market is set to come to an end with a tumultuous 2022 that is slightly higher.

Oil market tumultuous in 2022

KARACHI: A reduction in the cost of oil-based products is unlikely to happen within the next two weeks since the difference between the domestic and international rates was insignificant, but there was a good chance of a rise in the petroleum tax that is levied on diesel.

“The government may raise the petroleum levy for diesel.’

 

KARACHI: A decrease in the prices of Petroleum products is unlikely to happen within the next two weeks since the difference between rates in the international and domestic markets was not significant, but there was a good chance of a rise in the petroleum levy that is levied on diesel.

Wednesday saw an oil industry warns. In order to meet an International Monetary Fund (IMF) need to safeguard the loan program, the government may increase the price of diesel in order to generate more money from the petroleum tax.

Estimates from the oil industry revealed that, on average, the cost of gasoline decreased by Rs2 per liter for the following fortnight, compared to the current Rs214.80/liter; however, diesel for the next fortnight was also lower, in comparison to its current price. The federal government cut the cost of petroleum products in its most recent review. High-speed diesel now costs Rs227.80 per liter, a reduction of Rs7.5 per liter. 

The cost of gasoline was decreased by Rs10 per liter to Rs214.80 in addition to a fuel tax of Rs50 per liter. This will help the government collect more money.

The government hasn’t been imposing a tax on the sales of oil products.

People from the oil industry claimed that if you look at the price average of petroleum-related products. There will be only a slight increase in price for domestic consumers. Since there has not been any significant reduction in Free on Board (FOB) costs.

They warned that the cost of diesel could, however, rise. If the government increases the petroleum tax to please IMF to allow the revival of its program. Which was working hard to boost the declining foreign exchange reserve.

The reserves of the State Bank of Pakistan fell to $5.8 billion, according to the most recent data published by the central bank on Thursday.

“If the government remains in office for the rest of its tenure. It has to comply with the conditions of the IMF,” sources with knowledge of the issue stated. However, they claimed that if they thought the IMF would remove it from power at the beginning of January 2023. It might not increase the petroleum duty on diesel.

They were referring to recent statements made by the officials of the government. They stated that the government was likely to comply with the terms that the IMF set to revive the loan program.  Government pricing adjustments during the following two weeks are not necessary, though.

They also emphasized how the price of oil has historically been a source of political discontent in the nation. Particularly under the Pakistan Tehreek-e-Insaf (PTI) administration. Oil prices were frozen following the repeal of the tax on gasoline and sales.

 

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