ISLAMABAD .: On its last day in power, the outgoing government of the Pakistan Muslim League-Nawaz (PML-N) stayed away from taking the unpopular decision of increasing the oil prices and left it for the caretaker setup to review the petroleum products prices the next week.
The oil regulator, the Oil and Gas Regulatory Authority (Ogra), had recommended massive increase in oil prices for month of June. However, the prices will remain unchanged for next one week, according to the Ministry of Finance.
“Since our government ends today, and new prices of petrol, diesel and kerosene oil go in effect from tomorrow, therefore, on Ministry of Finance’s recommendation the PM has decided to leave their prices unchanged till June 7, so that the incoming government can decide new price,” finance minister Miftah Ismail tweeted on Thursday.
Talking to The Express Tribune, Ismail said the caretaker government will decide whether to increase oil prices or not. The final decision on price revision had to be taken by former premier Shahid Khaqan Abbasi on Thursday. However, for the first time the monthly review was deferred for seven days.
The PML-N has taken all such economic decisions which are considered favourable for the party but has deferred the decision of increasing prices of petroleum to win support of the public.
On Wednesday, Ogra recommended an increase of up to 16.9 per cent in prices of petroleum products for June 2018, following rise in global crude oil prices. The regulator had proposed a massive increase in prices of all petroleum products.
Ogra sent a summary to the Petroleum Division of the Ministry of Energy 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.
Quoting Ogra’s summary, officials of the Petroleum Division had said consumers of high-speed diesel, which is mostly used in transport and agriculture sectors, could face a price increase of Rs12.50 per letter (12.7% increase), which would take its per-litre price to Rs111.26 compared to existing Rs98.76.
Petrol price was also likely to go up from the existing Rs87.70 to Rs96.07 per litre with a hike of Rs8.37 (9.5%). Kerosene oil price was to be jacked up by Rs8.23 (10.3%), from Rs79.87 to Rs88.10 per litre. Kerosene is used for cooking purposes, especially in far-off areas where LPG or piped gas is not available.
Similarly, the price of light diesel oil, which is mainly consumed for industrial purposes, was supposed to go up by Rs11.65 (16.9%), which would take its per-litre price from Rs68.85 to Rs80.50.
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.