Prices of petroleum products to go up by around Rs7

Oil and Gas Regulatory Authority sends summary to petroleum ministry

ISLAMABAD: Officials of the Ministry of Petroleum and Natural Resources have revealed that prices of petroleum products could be increased by up to Rs6.93 per litre for January 2017 due to the global rise in crude oil prices.

The ministry on Thursday received a summary from the Oil and Gas Regulatory Authority (Ogra) that recommended an upward revision in oil prices. Prices of all petroleum products, except for kerosene oil, are deregulated and Ogra only monitors them.

The effect will be felt in prices of petrol, kerosene oil, high speed diesel (HSD) and light diesel oil (LDO).



According to Ogra’s summary, consumers of HSD, which is mostly used in the transport and agriculture sectors, may face a hike of Rs3.94 per litre. This increase will take the price of the HSD to Rs79.16 per litre from the existing Rs72.52 per litre.



Petrol price may go up from the existing Rs66.27 to Rs68.58 per litre.

The price of kerosene oil – used for cooking purposes in remote areas where liquefied petroleum gas is not readily available – may rise from Rs43.25 to Rs50.18 per litre after an increase of Rs6.93 per litre.

The price of the LDO, mainly used for industrial purposes, may go up from Rs43.34 to Rs46.82 per litre after an increase of Rs3.48 per litre.

The government has the capability to absorb the impact of proposed increase in oil prices by adjusting the tax rates on petroleum products. However, despite a decline of over 50% in global prices, consumers have largely been denied a full relief in previous months due to hefty taxes.



At present, two types of taxes are being charged from the oil consumers including petroleum levy and general sales tax. The finance ministry may oppose any proposal for keeping oil prices unchanged in the latest revision as it will affect the country’s revenues.

Final decision in this regard will, however, be taken during a cabinet meeting to be chaired by Prime Minister Nawaz Sharif.

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