Finance Minister Shaukat Tarin said on Thursday that the government is losing out on revenue to the tune of Rs70 billion a month on average, as it has been "protecting the common people" from higher oil prices in the international market.

“Following the 166% increase in international petroleum prices since November 2020, the government is continuously losing its revenue from sales tax and levy, just to protect common people from higher prices,” said Tarin in a tweet post.

"In FY22 alone, government on an average lost Rs70bn/month and Rs840bn for full year."

He further claimed that in Pakistan's history, no government has provided even 1/3rd of this relief in a single year.

"Even now the prime minister is keenly exploring the options with me, as how to offset the higher prices despite recent increase in salaries, and relief through Ehsaas Raashan," he added.

His statement comes as oil prices surged above $95 per barrel earlier this week amid increase in tensions between Ukraine and Russia, creating geopolitical uncertainty.

The increase in oil prices does not bode well for the South Asian economy, which remains a major importer of oil products, and faces a widening current account deficit and balance of payments pressure. The increase in oil prices in Pakistan has also increased inflationary concerns, with eyes now also set on the upcoming monetary policy announcement.

On Tuesday, the government announced a massive up to Rs12.03 per litre increase in the prices of petroleum products with effect from February 16, as it opted to pass on full impact of the drastic Brent oil surge in the international market to mitigate the fortnightly revenue loss of around Rs35 billion.

“Despite the increase in the prices of petroleum products, PL and GST have been kept to minimum,” the Finance Division in a statement.

However, the government raised the petroleum levy (PL) by Rs4 per litre for the second half of February to meet one of the conditions of the International Monetary Fund (IMF). The PL on petrol was raised from Rs13.92 per litre to Rs17.92 per litre, while on HSD it was increased to Rs13.30 per litre from Rs9.30 per litre.