Summary rejected: Govt keeps fuel prices unchanged

OGRA had suggested up to 14.6% increase in oil prices

ISLAMABAD: The government has decided to keep the prices of petroleum prices unchanged for June despite substantial surge in international crude oil prices, in an apparent move to garner public support ahead of the budget and holy month of Ramazan.

According to a summary of the Oil and Gas Regulatory Authority (Ogra), oil prices were likely to go up to 14.6% from June 1. But the authorities decided to keep the prices unchanged, which will cause an approximate revenue loss of Rs8.5 billion to the government.

Finance Minister Ishaq Dar announced the decision during a media talk. He said Premier Nawaz Sharif, who is in London for an open-heart surgery, rejected the summary to raise petroleum prices to prevent inflation during Ramazan.

The public is likely to face massive hike in prices of commodities during the holy month. And the government also plans to levy new taxes in the next budget and increase the rates of some existing ones.

The government believes keeping the petroleum prices unchanged will help evade criticism, observers said.

Prices of all products, except kerosene, are deregulated and Ogra only monitors the prices. The regulator had suggested increase in prices of petrol, high-speed diesel (HSD), light diesel oil (LDO), kerosene oil, high-octane blending component (HOBC), JP-1, JP-4 and JP-8.

According to the Orga summary, the price of HSD, which is mainly used in the transport and agriculture sectors, was to go up by Rs6.69 per litre (9.2 percent) from the existing Rs72.52.

Petrol price was proposed to be increased from the existing Rs64.27 to Rs65.12 per litre while the price per litre of kerosene, used for cooking purposes in remote areas, was to rise from Rs43.25 to Rs47.22.

Similarly, LDO, which is used in industries, was suggested to witness an increase of Rs4.47 per litre, meaning the price was to go up to Rs42.44.

The price of HOBC, mainly used in luxury cars, was to be hiked by Rs2.18 per litre to Rs74.86 from the existing Rs72.68 per litre.

The government, however, rejected the Ogra summary and maintained the prices of all these crude oil products.

Published in The Express Tribune, June 1^st, 2016.