Petrol prices in Pakistan still very cheap compared to rest of the world, says finance minister, day after price hike

Finance Minister Shaukat Tarin on Friday said petrol prices in Pakistan were cheaper than the rest of the region and the world, adding that only 16 countries had lower prices — all of them being oil producers themselves.

Addressing a press conference in Islamabad with Minister of State for Information Farrukh Habib, Tarin said: "There are only 16 other countries which have lower petrol prices than ours. They are oil producers and have their own oil."

The finance minister added that Pakistan had cheaper petrol prices than other regional countries as well, such as India and Bangladesh. "We are cheaper than the [rest of the] region and the world as well. Do we want to reduce it (petrol price) further? absolutely," Tarin said.

He said the current issue was if the government reduced prices then it would have to pay out of its pocket to fulfil revenue requirements. Tarin added that the petroleum levy had also been reduced to Rs2 to Rs3 per litre from Rs30/litre in 2018.

"We are not even charging [petroleum] levy even though we have kept a target of Rs600 billion for it in the budget. But we and the prime minister didn't care for it.

"The prime minister said that we can't burden the people further so this is a signal [about] what feelings the current ruler has for the poor," the finance minister said.

His comments came a day after the government increased the petrol price by Rs4 per litre. The price of petrol stands at Rs127.30 per litre from October 1 (today).

In a press release, the Finance Division said the Oil and Gas Regulatory Authority had worked out higher petroleum prices based on an increase in prices in the international market as well as exchange rate variations in the last two weeks.

However, Prime Minister Imran Khan had "decided against the recommendation and passed on the minimum increase in prices to the consumers", it stated.

The government absorbed the higher international pressure of prices through a reduction in the petroleum levy and the sales tax, according to the notification. "Petroleum prices in Pakistan are the cheapest in the region," it had said.

More to follow.