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Pakistan Petrol Price Shock: Half Your Payment Goes to Taxes & Margins

An internal government document reveals that nearly half of Pakistan's retail petrol price is composed of government levies and industry profit margins. The disclosure comes just after a massive price hike pushed petrol to Rs 458.41 and diesel to Rs 520.35 per litre. For petrol, the ex-refinery cost is Rs 247.15, while taxes and margins add Rs 211.26, with a petroleum levy alone accounting for Rs 160.61. In contrast, diesel currently has no petroleum levy, making its tax-and-margin burden significantly lower at 11.36% of the retail price.

Key Points: Pakistan Petrol Price: 50% is Taxes & Margins, Report Reveals

  • Petrol price hits Rs 458.41/litre
  • Diesel price soars to Rs 520.35/litre
  • Petroleum levy is Rs 160.61/litre on petrol
  • Diesel currently attracts no petroleum levy
2 min read

Taxes, margins eat half of Pakistan's petrol price, consumers cry: Report

Internal document shows taxes and margins consume nearly half of Pakistan's petrol price, as government hikes fuel rates to record highs.

"taxes and margins on diesel total Rs 59.12 per litre -- 11.36 per cent of the retail price - Geo News report"

New Delhi, April 4

Pakistani consumers are bearing almost half of petrol's retail cost in the form of government levies and industry profit margins, an internal government document has revealed, coming just a day after a massive increase in the prices of both petrol and diesel was announced, a report said.

According to the Geo News report, Petroleum Minister Ali Pervaiz Malik, speaking alongside Finance Minister Muhammad Aurangzeb at a press briefing, announced a Rs 137.23-per-litre rise in petrol prices, pushing the retail rate to Rs 458.41 per litre.

Moreover, high-speed diesel climbed even more steeply, up Rs 184.49 per litre to a new benchmark of Rs 520.35.

Both hikes were attributed to disruptions in the global oil supply chain stemming from the ongoing conflict in the Middle East.

The Ministry of Energy's pricing document lays bare a cost structure that places the ex-refinery price of petrol at Rs 247.15 per litre -- less than the Rs 211.26 per litre piled on through taxes and margins.

Of that non-product portion, a petroleum levy alone accounts for Rs 160.61 per litre, followed by Rs 24.12 in customs duty and Rs 2.50 under the climate support levy.

The inland freight margin adds another Rs 7.52, while oil marketing companies (OMCs) collect Rs 7.87 in profit and pump dealers retain an Rs 8.64 commission per litre.

The picture is markedly different for diesel consumers. The ex-refinery price of high-speed diesel stands at Rs 461.23 per litre, and, unlike petrol, diesel currently attracts no petroleum levy.

In addition, combined taxes and margins on diesel total Rs 59.12 per litre -- 11.36 per cent of the retail price -- comprising Rs 35.74 in customs duty, Rs 4.37 for inland freight, Rs 7.87 in OMC profit, Rs 8.64 for dealers, and the Rs 2.50 climate levy.

The disclosures have drawn fresh scrutiny to the government's fiscal strategy, with petrol's tax-and-margin share more than four times that of diesel, even as pump prices for both fuels reach record highs.

- IANS

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Reader Comments

S
Sarah B
The disparity between petrol and diesel taxation is interesting. No petroleum levy on diesel suggests a policy choice, maybe to keep transport costs lower? But petrol at nearly ₹460/litre is unsustainable for middle-class families. It will have a ripple effect on the cost of everything.
P
Priya S
Feeling for the average Pakistani citizen. We complain about fuel prices here, but this is another level. A 'climate support levy' of Rs 2.50 when the basic price is so high feels like adding insult to injury. Governments need to find revenue sources that don't crush daily wage earners.
R
Rohit P
While the situation is tough, let's not forget our own taxes form a major chunk of the petrol price in India too. The breakdown of OMC profit and dealer commission is almost identical. It's a tough balance for any government - need revenue for development, but also can't overburden people.
M
Meera T
The report says the hikes are due to Middle East conflict. It's a global issue affecting all oil-importing nations. Hope there is peace soon so that ordinary people in all neighboring countries, including India and Pakistan, can get some relief. Inflation is a common enemy.
D
David E
The transparency in publishing this internal document is actually a good step. Citizens deserve to know where their money is going. More governments should do this. The ₹160 petroleum levy is the real killer here. That's pure government tax.

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