OGRA recommends hike of Rs6.21 per litre in petrol price

Proposed increase will take fuel price from existing Rs97.83 to Rs104.04 per litre

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) recommended the government on Thursday to increase the price of petrol by Rs6.21 per litre for December 2018 due to multiple rounds of rupee depreciation against the dollar.

Officials in Ogra told The Express Tribune that the regulator had sent a summary to the Ministry of Energy (Petroleum Division) for notifying revised prices for the month of December. The prime minister is set to take the decision on Friday (today).

Ogra proposed an increase of Rs6.21 per litre in petrol, Rs2.00 per litre in high speed diesel (HSD), Rs9.91 per litre in kerosene oil and Rs7.79 per litre in light diesel oil (LDO). The regulator calculated these prices based on 17% general sales tax. Currently, the government is charging 4.5% general sales tax on petrol, 12% on HSD, 1.5% on kerosene oil and no tax on LDO.

If the government accepts Ogra’s recommendation, then petrol prices would rise from the existing Rs97.83 per litre to Rs104.04 per litre. CNG is known as an ‘alternative fuel’ but its consumption has declined due to the ban on indigenous gas in CNG outlets mainly in the Punjab province. Lately, the demand for petrol has risen and CNG outlets in Punjab have started using imported gas.

The regulator also recommended an increase of Rs2.00 in the price of HSD, which is widely used in transport and agriculture sector. If this revision takes place, the price of HSD would rise to Rs114.94 per litre from the existing Rs112.94 per litre.

Similarly, Ogra proposed a price surge of Rs9.91 per litre in kerosene, from existing Rs86.50 to Rs96.41 litre. Kerosene oil is used in remote areas including northern Pakistan where LPG is scarce and not available for cooking purpose. The authority further suggested a hike in LDO prices, which if accepted would inflate the rates from existing Rs82.44 to Rs90.23 per litre. LDO is widely used by industries.

In November, the government increased the prices of all petroleum products with immediate effect by up to 8.5%. It decided to absorb the major impact of increase in prices of petroleum products and partially pass the increase on to consumers.

Published in The Express Tribune, November 30^th, 2018.

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