Fuel prices to stay stable in August

'Govt will absorb rising impact in global oil prices even at the cost of incurring revenue loss of Rs2 billion' Dar

ISLAMABAD: Thumbing its nose at the oil and gas regulatory body’s summary to raise the prices of petroleum products, the government on Saturday decided to keep oil prices unchanged in the month of August.

The decision was announced by Finance Minister Ishaq Dar, who claimed that the government, on the instruction of Prime Minister Nawaz Sharif, will absorb the rising impact in global oil prices even at the cost of incurring a revenue loss of Rs2 billion.

“Ogra [Oil and Gas Regulatory Authority] had presented a summary to the prime minister proposing an increase of oil prices by four to nine per cent but the prime minister rejected it,” Dar said, adding that Ogra had calculated an increase in the fuel prices due to rising international oil rates.

Giving details, the minister said Ogra had proposed to increase the price of petrol by Rs2.12, the price of High Speed Diesel (HSD) by Rs0.26, the price of kerosene oil by Rs3.94 and the price of High Octane Blended Component (HOBC) by Rs0.60. Ogra had also proposed to reduce the price of Light Diesel Oil (LDO) by Rs1.24.

He said the government decided to adjust the increase in oil prices in the petroleum levy (PL) that had been reduced in the previous months to maintain the prices locally in the wake of rising trend at the international markets.

However, Dar said, the PL was still lower than what it was on March 1, 2013 on the five mainstream petroleum fuels. The minister said currently the PL on petrol is Rs8.19 per litre that was Rs10 per litre on March 1, 2013.

Similarly, it is Rs7.80 on the HSD compared to Rs8 per litre before this government took over. “Currently, the PL on the HOBC is Rs13.49 compared to Rs14 per litre on March 1, 2013. The current PL is also lower on kerosene oil and the LDO,” he added.

After the decision, the price of HSD will remain Rs72.52 per litre during the month of August. HSD is the highest selling fuel in the country as it is consumed by heavy engines such as buses, trucks and tractors and electricity generators.

The second most widely consumed petroleum fuel is petrol, whose price will remain unchanged at Rs64.27 per litre. The price of the HOBC will remain Rs72.68 per litre; of kerosene oil Rs43.25per litre and of light diesel oil (LDO) Rs43.35 per litre.

Published in The Express Tribune, July 31^st, 2016.