ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has recommended an increase of up to 16.9% in prices of petroleum products for June 2018, taking cue from rising global crude prices.
The regulator has proposed a massive increase in prices of all petroleum products.
Ogra sent a summary to the Ministry of Energy (Petroleum Division) on Wednesday with recommendation for upward revision in petroleum prices. Prices of all petroleum products, except for kerosene, are deregulated and Ogra is tasked with just monitoring them.
Following the global price hike, the effect will be felt in domestic prices of petrol, kerosene, high-speed diesel and light diesel oil.
Quoting Ogra’s summary, officials of the Petroleum Division said consumers of high-speed diesel, which was mostly used in transport and agriculture sectors, may face a price increase of Rs12.50 (12.7%), which would take its per-litre price to Rs111.26 compared to existing Rs98.76.
Petrol price is likely to go up from existing Rs87.70 to Rs96.07 per litre with a hike of Rs8.37 (9.5%).
Kerosene oil price may be jacked up by Rs8.23, or 10.3%, from Rs79.87 to Rs88.10 per litre. Kerosene oil is used for cooking purposes, especially in far-off areas where liquefied petroleum gas (LPG) or piped gas is not available.
Similarly, the price of light diesel oil, which is mainly consumed for industrial purposes, may go up by Rs11.65 (16.9%), which will take its per-litre rate from Rs68.85 to Rs80.50.
Despite the recommendation for price increase, the government has the capability to absorb the impact of increase in oil prices by adjusting rates of taxes on petroleum products.
At present, consumers are paying two types of taxes – petroleum levy and general sales tax. However, the finance ministry may oppose any proposal for keeping petroleum prices unchanged because it will affect government’s revenue receipts.
The government is collecting a very high 31% sales tax on high-speed diesel whereas on all other petroleum products it receives 17% tax.
Moreover, it is charging petroleum levy at the rate of Rs8 per litre on high-speed diesel, Rs10 per litre on petrol, Rs6 per litre on kerosene oil and Rs3 per litre on light diesel oil.
However, the final decision on price revision will be taken by Prime Minister Shahid Khaqan Abbasi on Thursday.