Ogra proposes increase of Rs3.94 in POL prices

Finance ministry likely to oppose any proposal to keep oil prices unchanged

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has worked out an increase of up to Rs3.94 per litre in the prices of petroleum products for the month of August, citing the latest surge in prices of POL products in international markets.

In a summary sent to the government, Ogra reported increase in the international oil prices in July that needed to be passed on to consumers — if taxes were not lowered.



The regulator had recommended increasing the price of petroleum products by up to 19.9% after rates of crude oil surged in international markets. However, the government kept the prices of almost all petroleum products unchanged. The price of only light diesel was increased.

Prices of all petroleum products, except kerosene, have been deregulated and Ogra only monitors fluctuation in their prices. The final decision to increase or continue with the existing price levels rests with Prime Minister Nawaz Sharif.

But it also said that the prices of petroleum products could be maintained at the existing level or could even be brought down if tax rates on these products — the highest in the country’s history — were partially reduced or brought back to the budgeted position.

Despite a decline of over 50% in global prices, consumers have largely been denied full relief due to hefty taxes. At present, oil consumers are being charged two types of taxes: petroleum levy and general sales tax.

The finance ministry may oppose any proposal to keep oil prices unchanged in the latest revision because it could affect revenue.



Based on the tax rates and Pakistan State Oil’s purchases from international market, Ogra worked out an increase of Rs2.12 per litre in the ex-depot price of petrol to Rs66.39 from Rs64.27. The sale price of the HSD would increase by Rs0.26 to Rs72.78 per litre, HOBC by Rs0.60 to Rs73.28 while LDO may record a decline of Rs1.24 taking its price to Rs42.11 per litre from Rs43.35.

The price of kerosene may be increased from Rs43.25 to Rs47.19 litre — an increase of Rs3.94.

Published in The Express Tribune, July 30^th, 2016.