Petrol, diesel prices left unchanged
Govt will take Rs3b hit to keep prices at current levels
The new budget for 2016-17 was going to be implemented from July 1 and it would lead to higher prices of commodities, which was also the reason why the government avoided increasing oil prices for the consumers. PHOTO: AFP
ISLAMABAD:
The government decided on Thursday to keep prices of almost all petroleum products unchanged for July 2016 just about a week before the beginning of Eid festivities.
In a statement, the Ministry of Finance announced that in line with Prime Minister Nawaz Sharif’s policy of providing maximum cushion to the public, prices of petrol, high octane blending component, high-speed diesel and kerosene would be left unchanged for July 2016.
Petroleum products: OGRA recommends upward revision in oil prices
However, the price of light diesel oil is being increased by Rs5.38 per litre according to recommendation of the Oil and Gas Regulatory Authority (Ogra). Now, light diesel oil, which is used in industrial units, will be sold for Rs43.35 per litre from July 1 compared to Rs37.97 earlier.
Finance Minister Muhammad Ishaq Dar made the announcement about oil prices in the evening. “Keeping petroleum product prices unchanged for July is a gift from the government to people on the occasion of Eidul Fitr. The government will bear a burden of Rs3 billion to maintain current oil prices,” he said.
On Wednesday, however, Ogra in its summary sent to the Ministry of Petroleum and Natural Resources recommended an upward revision in oil prices, citing the increase in international crude prices.
Prices of all petroleum products, except for kerosene oil, have been deregulated and Ogra only monitors them.
The government has the capability to absorb the impact of proposed increase in oil prices by adjusting the rates of taxes on petroleum products.
Though crude prices have plunged over 50% in global markets, consumers have largely been denied a full relief because of heavy taxes to avoid revenue loss to the government.
Now, the government has maintained the prices by reducing the tax on petroleum products. Two types of taxes are charged from the oil consumers including petroleum levy and general sales tax.
Property, petrol pumps come under greater tax ambit
According to officials, the Ministry of Petroleum had proposed that prices of petrol and high-speed diesel, which was mainly used by transport and agricultural sectors, should be kept unchanged.
However, it recommended an increase in rates of all other products, but the prime minister turned down the suggestion in order to provide relief to the consumers.
The new budget for 2016-17 was going to be implemented from July 1 and it would lead to higher prices of commodities, which was also the reason why the government avoided increasing oil prices for the consumers, officials said.
In its summary, Ogra had recommended that prices of petrol, high octane blending component, high-speed diesel and kerosene oil should be jacked up by Rs1.93, Rs3.53, Rs3.75 and Rs8.62 per litre respectively.
However, rates of these products will remain at existing levels at Rs64.27, Rs72.68, Rs72.52 and Rs43.25 per litre respectively.
Published in The Express Tribune, July 1st, 2016.
The government decided on Thursday to keep prices of almost all petroleum products unchanged for July 2016 just about a week before the beginning of Eid festivities.
In a statement, the Ministry of Finance announced that in line with Prime Minister Nawaz Sharif’s policy of providing maximum cushion to the public, prices of petrol, high octane blending component, high-speed diesel and kerosene would be left unchanged for July 2016.
Petroleum products: OGRA recommends upward revision in oil prices
However, the price of light diesel oil is being increased by Rs5.38 per litre according to recommendation of the Oil and Gas Regulatory Authority (Ogra). Now, light diesel oil, which is used in industrial units, will be sold for Rs43.35 per litre from July 1 compared to Rs37.97 earlier.
Finance Minister Muhammad Ishaq Dar made the announcement about oil prices in the evening. “Keeping petroleum product prices unchanged for July is a gift from the government to people on the occasion of Eidul Fitr. The government will bear a burden of Rs3 billion to maintain current oil prices,” he said.
On Wednesday, however, Ogra in its summary sent to the Ministry of Petroleum and Natural Resources recommended an upward revision in oil prices, citing the increase in international crude prices.
Prices of all petroleum products, except for kerosene oil, have been deregulated and Ogra only monitors them.
The government has the capability to absorb the impact of proposed increase in oil prices by adjusting the rates of taxes on petroleum products.
Though crude prices have plunged over 50% in global markets, consumers have largely been denied a full relief because of heavy taxes to avoid revenue loss to the government.
Now, the government has maintained the prices by reducing the tax on petroleum products. Two types of taxes are charged from the oil consumers including petroleum levy and general sales tax.
Property, petrol pumps come under greater tax ambit
According to officials, the Ministry of Petroleum had proposed that prices of petrol and high-speed diesel, which was mainly used by transport and agricultural sectors, should be kept unchanged.
However, it recommended an increase in rates of all other products, but the prime minister turned down the suggestion in order to provide relief to the consumers.
The new budget for 2016-17 was going to be implemented from July 1 and it would lead to higher prices of commodities, which was also the reason why the government avoided increasing oil prices for the consumers, officials said.
In its summary, Ogra had recommended that prices of petrol, high octane blending component, high-speed diesel and kerosene oil should be jacked up by Rs1.93, Rs3.53, Rs3.75 and Rs8.62 per litre respectively.
However, rates of these products will remain at existing levels at Rs64.27, Rs72.68, Rs72.52 and Rs43.25 per litre respectively.
Published in The Express Tribune, July 1st, 2016.