Oil prices likely to rise up to Rs13 per litre
OGRA proposes increase of Rs2.28 per litre for petrol, Rs2.04 for HSD
PHOTO: FILE
ISLAMABAD:
Oil prices are likely to rise up to Rs13 per litre from April 1 this year following fluctuations in global crude prices.
The Oil and Gas Regulatory Authority (Ogra) on Thursday recommended to the federal government to increase prices of petroleum products at the beginning of next month. Final approval will be given on Friday.
Sources said Ogra had proposed an increase of Rs2.28 per litre for petrol (motor spirit), Rs2.04 for high-speed diesel (HSD), Rs13 for kerosene oil (superior) and Rs7.75 for light diesel oil (LDO). A summary in this regard has been sent to the Ministry of Petroleum and Natural Resources.
According to the summary, after the increase, the price of petrol will go up to Rs75.28 per litre from the current Rs73 whereas the price of HSD will go up to Rs84.04 per litre from the current Rs82.
Global crude rates: Prices of petroleum products set to rise by 38.6 per cent
The price of superior kerosene oil will rise to Rs57 per litre from the existing Rs44 and the price of LDO will increase from Rs44 to Rs51.75 per litre.
Over the past couple of years, following the plunge in global crude prices, the government has burdened consumers with heavy taxes, especially on petrol and HSD, which are widely used in small and heavy vehicles and agriculture sector.
The government has room to absorb the impact of increase in crude prices as it is still collecting heavy taxes on petroleum products. It is collecting over Rs25 billion in GST on petroleum products and Rs10 billion in petroleum levy every month from the consumers.
Owing to heavy taxes, consumers in Pakistan have been paying up to 38% more on oil compared with prices prevailing in the international market to make up for the shortfall in government revenue.
Here's how much more Pakistani oil consumers are paying than global prices
According to a report submitted by Ogra to the Economic Coordination Committee (ECC) of the cabinet, financial year 2015-16 was the worst for Pakistani oil consumers during which they paid the highest rate of sales tax on HSD. HSD has the highest consumption in the country compared to other products.
Consumers paid GST up to Rs29.57 per litre on HSD during 2015-16, in addition to Rs6 per litre in petroleum levy, stated the report.
They also paid GST up to Rs15.22 per litre on petrol, Rs13.18 per litre on kerosene oil and Rs12.21 per litre on LDO. These were the highest rates which were charged for a few months.
After the increase in global oil prices, the tax rate was reduced to Rs19.39 per litre on HSD in 2016-17, when the government tried to absorb some of the impact of the hike in oil prices to provide relief to the consumers.
Govt jacks up oil prices, cuts power tariff
In the year, the highest rate of GST on petrol was Rs10.71 per litre, kerosene oil Rs2.83 per litre and LDO Rs4.64 per litre.
The maximum rates of GST charged in 2013-14 - the year when the current government came to power - were Rs16.45, Rs16.96, Rs15.71 and Rs14.71 per litre on petrol, HSD, kerosene oil and LDO respectively.
Petrol and diesel are widely used by the consumers, with the latter being used in agriculture and heavy vehicles. Therefore, high rates of diesel directly impact the farmers, causing inflation due to increase in the cost of transportation.
Oil prices are likely to rise up to Rs13 per litre from April 1 this year following fluctuations in global crude prices.
The Oil and Gas Regulatory Authority (Ogra) on Thursday recommended to the federal government to increase prices of petroleum products at the beginning of next month. Final approval will be given on Friday.
Sources said Ogra had proposed an increase of Rs2.28 per litre for petrol (motor spirit), Rs2.04 for high-speed diesel (HSD), Rs13 for kerosene oil (superior) and Rs7.75 for light diesel oil (LDO). A summary in this regard has been sent to the Ministry of Petroleum and Natural Resources.
According to the summary, after the increase, the price of petrol will go up to Rs75.28 per litre from the current Rs73 whereas the price of HSD will go up to Rs84.04 per litre from the current Rs82.
Global crude rates: Prices of petroleum products set to rise by 38.6 per cent
The price of superior kerosene oil will rise to Rs57 per litre from the existing Rs44 and the price of LDO will increase from Rs44 to Rs51.75 per litre.
Over the past couple of years, following the plunge in global crude prices, the government has burdened consumers with heavy taxes, especially on petrol and HSD, which are widely used in small and heavy vehicles and agriculture sector.
The government has room to absorb the impact of increase in crude prices as it is still collecting heavy taxes on petroleum products. It is collecting over Rs25 billion in GST on petroleum products and Rs10 billion in petroleum levy every month from the consumers.
Owing to heavy taxes, consumers in Pakistan have been paying up to 38% more on oil compared with prices prevailing in the international market to make up for the shortfall in government revenue.
Here's how much more Pakistani oil consumers are paying than global prices
According to a report submitted by Ogra to the Economic Coordination Committee (ECC) of the cabinet, financial year 2015-16 was the worst for Pakistani oil consumers during which they paid the highest rate of sales tax on HSD. HSD has the highest consumption in the country compared to other products.
Consumers paid GST up to Rs29.57 per litre on HSD during 2015-16, in addition to Rs6 per litre in petroleum levy, stated the report.
They also paid GST up to Rs15.22 per litre on petrol, Rs13.18 per litre on kerosene oil and Rs12.21 per litre on LDO. These were the highest rates which were charged for a few months.
After the increase in global oil prices, the tax rate was reduced to Rs19.39 per litre on HSD in 2016-17, when the government tried to absorb some of the impact of the hike in oil prices to provide relief to the consumers.
Govt jacks up oil prices, cuts power tariff
In the year, the highest rate of GST on petrol was Rs10.71 per litre, kerosene oil Rs2.83 per litre and LDO Rs4.64 per litre.
The maximum rates of GST charged in 2013-14 - the year when the current government came to power - were Rs16.45, Rs16.96, Rs15.71 and Rs14.71 per litre on petrol, HSD, kerosene oil and LDO respectively.
Petrol and diesel are widely used by the consumers, with the latter being used in agriculture and heavy vehicles. Therefore, high rates of diesel directly impact the farmers, causing inflation due to increase in the cost of transportation.