ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) on Wednesday recommended a raise of Rs1.48, or 1.9%, in per litre price of petrol for the month of December.
The regulator recommended up to 28.9% increase in the prices of petroleum products on the back of a surge in crude oil rates in the world markets.
The Ministry of Energy (Petroleum Division) is in receipt of a summary from the OGRA that has suggested the upward revision in oil prices.
The OGRA also recommended an increase of Rs15.35 per litre in the price of superior kerosene oil (SKO) and Rs13.15 per litre in the price of light diesel oil (LDO).
If the government approves the regulator’s determinations, the new petrol price will be Rs77.47 per litre against the existing Rs75.99 per litre.
After an increase of Rs15.35, the price of SKO would settle at Rs68.54 per litre from its existing rate of Rs53.19 per litre.
With an increase of Rs13.15 per litre, the price of Light Diesel Oil (LDO) would go up as high as Rs62.15 from the existing Rs49 per litre.
After deregulation of High Speed Diesel (HSD), the increase in Pakistan State Oil (PSO) weighted average ex-refinery price of HSD along with its IFEM was worked out effective from December 1.
The PSO increased ex-refinery price of HSD by Rs1.2 per litre and decreased IFEM by Rs0.16. After the increase, the weighted average price of HSD will go up to Rs51.27 from existing Rs50.07 and IFEM’s price will decreased to Rs1.26 from Rs1.42.
The government also deregulated margins of oil industry on HSD and its price would now be determined based on the weighted average price of PSO.
The oil industry will announce final prices after including their margins and taxes in ex-refinery price of HSD.
Over the past couple of years – following plunging global crude prices – the government burdened petroleum consumers with general sale tax and petroleum levy. The OGRA proposed the GST rate at 17% on various products for “maintaining price stability and earning higher revenue”.
On the recommended prices of OGRA, the Federal Board of Revenue (FBR) will charge 17% GST on petroleum products, including LDO and SKO.
Moreover, the government is also charging petroleum levy up to Rs10 per litre on prices of oil products.
According to OGRA recommendations, the budgeted petroleum levy is Rs10 per litre on petrol, Rs6 on SKO and Rs3 on LDO.
The summary was forwarded to the petroleum division as a routine practice, which will forward it to the finance ministry and then to Prime Minister’s office for a decision. Oil prices are routinely revised on the last day of every month.