Petrol, diesel prices up by Rs1.77, Rs2 a litre

ISLAMABAD: The government on Sunday announced plans to increase the prices of MS 92 RON petrol and high speed diesel (HSD) by Rs1.77 per litre and high-speed diesel (HSD) by Rs2 per litre, respectively.

The new petroleum prices will take effect from January 16 and be effective till January 31.

This is the second time that the government switched from a monthly to a fortnightly oil prices review.

Finance Minister Ishaq Dar announced that the rise in petrol price was in line with Ogra’s recommendations, but the increase in HSD rate was almost half of the suggested increase.

However, the prices of kerosene oil and Light Diesel Oil (LDO) would remain unchanged.

Refineries charge deemed duty on diesel but there is no duty on kerosene oil. By mixing with diesel, refineries indirectly earned additional profit on kerosene oil. Petroleum dealers also earned extra money on kerosene oil by the same process.

Officials of Pakistan State Oil (PSO) admitted before the parliamentary panel on petroleum that the practice of mixing kerosene oil with diesel was on the rise and suggested a hike in the price of kerosene oil to avoid adulteration.

Federal Finance Minister Senator Mohammad Ishaq Dar said that the ministry of Petroleum and Natural Resources and Ogra had recommended an increase of Rs1.77 per litre in the price of MS 92 RON petrol, Rs3.94 per litre in the price of HSD, Rs14.31 per litre in the price of kerosene oil and Rs10.11 per litre in the price of LDO.

He said that new prices of petroleum products were in line with the prime minister’s instructions to provide maximum relief to the masses, and keeping in view that kerosene oil and LDO were used by the low-income segments of the country’s population, it was decided to maintain the prices of kerosene oil and LDO at current level till January 31.

This decision was also taken in view of the fact that kerosene oil catered to the energy needs of the poor, especially in winter.

The finance minister said that prices had been maintained since April last year despite an increase of around 43 percent in international oil prices during 2016.

He said that the government had since been absorbing the negative financial impact.

He pointed out that previously, only a partial increase in petrol and HSD was passed on to end consumers in December last year, “against OGRA recommendations”.

The finance ministry, he said, would bear a revenue loss of nearly Rs2.75 billion as a result of the decision to not pass on the actual increase in prices of petroleum products to the people.

Published in The Express Tribune, January 16^th, 2017.