According to Topline Securities, the recent rise in petroleum product prices will have an inflationary effect of 100 basis points for a 20% increase in gasoline prices.
Despite the steep price hikes, the government continues to provide a subsidy of Rs. 17.02 per liter for petrol and Rs. 56.71 per liter for diesel. The subsidy known as Price Differential Claim (PDC) was Rs. 47.02 per liter for petrol and Rs. 86.71 for diesel before yesterday’s price rise.
Oil marketing firms‘ receivables would be reduced as a result of the government’s decision, with a loss of Rs. 32 billion predicted for Pakistan State Oil (PSO). Furthermore, PSO’s liquidity is projected to improve. According to Topline Securities, this will result in a 3 to 4% decrease in basic profits per share (EPS).
Subsidies on petroleum products would be reduced by about Rs. 80 billion per month as a result of the price rise. Previously, the government was paying up to Rs. 140 billion in monthly subsidies on gasoline items.
The new price of petrol is Rs. 179.86 per liter, the price of high-speed diesel is Rs. 174.15 per liter, the price of kerosene is Rs. 155.56 per liter, and the price of light diesel oil is Rs. 148.31 per liter, thanks to an Rs. 30 per liter rise in petroleum product prices across the board.
For the latest Business & Tech news, follow on Facebook, and Google News. For the latest news on business & technology
Discussion about this post