Pakistani consumers are shouldering nearly half of the retail cost of petrol due to government levies and industry profits, as revealed by an internal government document. Following a substantial increase in petrol and diesel prices, Petroleum Minister Ali Pervaiz Malik, alongside Finance Minister Muhammad Aurangzeb, announced a significant rise in petrol prices to Rs 458.41 per litre.
The price of high-speed diesel also surged, reaching Rs 520.35 per litre. These price hikes were attributed to disruptions in the global oil supply chain caused by conflicts in the Middle East. The Ministry of Energy’s pricing document highlights a cost breakdown showing that taxes and margins contribute more to the retail price than the actual ex-refinery price of petrol.
The document reveals that the ex-refinery price of petrol is Rs 247.15 per litre, with additional costs of Rs 211.26 per litre in taxes and margins. Notably, a significant portion of this additional cost is due to a petroleum levy of Rs 160.61 per litre. Other components include customs duty, climate support levy, inland freight margin, profit for oil marketing companies, and commission for pump dealers.
For diesel consumers, the ex-refinery price of high-speed diesel is Rs 461.23 per litre, with taxes and margins amounting to Rs 59.12 per litre. Unlike petrol, diesel does not have a petroleum levy. The breakdown includes customs duty, inland freight, profit for oil marketing companies, commission for dealers, and the climate levy. These revelations have raised concerns about the government’s taxation strategy, especially the disproportionate tax burden on petrol compared to diesel.
