Fuel prices likely to go up by Rs5.6 per litre

Ogra sends summary to PM; new prices will be applicable from April 1

ISLAMABAD: Fuel prices are likely to go up in the country by up to Rs5.64 per litre due to fluctuations in global prices of crude oil. The new prices will be applicable from April 1.

Taking to The Express Tribune, a senior official said the Petroleum Ministry received a summary on Wednesday from the Oil and Gas Regulatory Authority (Ogra), suggesting an increase in oil prices. Ogra deregulates and monitors prices of petroleum products.

“However, the final decision will be taken by Prime Minister Nawaz Sharif on Thursday (today),” he said.



Following the rise, an effect will be felt in the prices of petrol, high speed diesel (HSD), light diesel oil (LDO), kerosene oil , high octane blending component (HOBC) and jet fuel.



According to the summary, petrol price may go up from the existing Rs62.77 to Rs65.86, registering an increase of Rs3.09 per litre.

Price of the HSD, which is used mostly in the transport and agriculture sectors, may face a hike of Rs1.40, after which its per litre rate will increase to Rs72.52 from the existing Rs71.12 per litre.

The price of kerosene oil, used in stoves in remote areas where liquefied petroleum gas (LPG) is not readily available, can increase by Rs5.64 to Rs48.89 per litre. Its existing price is Rs43.25 per litre.

Similarly the LDO, mainly used for industrial purposes, may record an increase of Rs4.91 per litre, meaning the price will go up from Rs37.97 to Rs42.88 per litre.



The price of HOBC, chiefly used in luxury cars, may witness a hike of Rs4.67 per litre, taking the price to Rs77.35 from Rs72.68 per litre. The price of jet fuel or JP-1 may go up by Rs3.68 per litre from Rs32.67 to Rs36.35 per litre.

At present, the government charges Rs29.57 General Sales Tax (GST) on each litre of HSD and Rs14.48 on every litre of petrol. Petroleum levy (PL) on the same products is, respectively, Rs10 and Rs8 per litre.

The official said the government has the leverage to absorb the rising impact of oil prices by cutting the rate of tax. However, the Finance Ministry is likely to oppose any cut in taxes to avoid revenue loss. The government collects around Rs30 billion as the GST and Rs10 billion as the PL on petroleum products.

Earlier, the government charged the GST in percentage and collected Rs20 billion on account of GST per month. However, the government fixed the GST’s rate on petroleum products to stop revenue loss and this mechanism has resulted in an increase in GST collection by Rs30 billion.

 

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