PSO Gets Huge Price Benefit on Fuel Rates to Offset Losses From PKR Devaluation

The federal government granted Pakistan State Oil (PSO) an exchange rate adjustment of Rs. 9.92 per litre on petrol and Rs. 13.12 per litre on high-speed diesel (HSD), while maintaining the petroleum development levy at the previous month’s rates.

Petroleum prices closed at US dollar/Rs. 236.40 on January 27 and Rs. 271.08 on February 15 according to the Oil and Gas Regulatory Authority (OGRA) ex-refinery sale price data. According to Business Recorder, the oil marketing companies (OMCs) estimated that the exchange rate would cause the price of petrol to rise by Rs. 32.07 per litre and the price of HSD to rise by Rs. 32.84 per litre.

The government appears to have absorbed the exchange rate adjustment by revising the rate of inland freight equalisation margin (IFEM) on both gasoline and diesel.

The average Platts with incidentals and duty on petrol increased by Rs. 18.19 to Rs. 195.66 on February 16th. Petrol ex-refinery has risen by Rs. 28.11 per litre to Rs. 205.58 on February 16, 2023, up from Rs. 177.47 on January 29, 2023.

According to additional data, the PDL on petrol remained at Rs. 50 per litre, while the IFEM fell by Rs. 5.91 per litre to Rs. 3.42 per litre, down from Rs. 9.33 per litre.

The margin for the dealer is Rs. 7 per litre, while the margin for the distance is Rs. 6.00 per litre. Petrol ex-depot increased by Rs. 22.20 per litre on February 16 to Rs. 272.00 per litre, up from Rs. 249.80 per litre on January 29, 2023.

High-Speed Diesel

On February 16, the average Platts with incidentals and duty on diesel (HSD) increased by Rs. 13.09 to Rs. 221.30 per litre, up from Rs. 208.21 on January 29. In the case of HSD, the PSO exchange adjustment was reduced by three paisas (0.03) per litre on February 16 from Rs. 13.15 on January 29 to Rs. 13.12 on February 16. HSD was priced ex-refinery at Rs. 234.42, a Rs13.05 increase per litre.
On February 16, the IFEM fell from Rs. 9.33 per litre to Rs. 6.76 per litre. HSD has a dealer margin of Rs. 7 per litre and a distance margin of Rs. 5.34 per litre. The ex-depot price has risen from Rs. 262.80 to Rs. 280 per litre.

As of January 29, the PDL for high-speed diesel remained unchanged at Rs. 40 per litre.

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