OGRA recommends Rs8.53 per litre hike in petrol price

Proposes increase of Rs8.99 in the price of high-speed diesel

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has recommended an increase of up to Rs8.99 in petroleum product prices for June 2019 following fluctuations in global crude prices and rupee depreciation against the US dollar.

The oil and gas sector regulator has sent its recommendations to the Petroleum Division for approval.

Ogra worked out the increase in prices of petroleum products following the rise in international crude prices amid fears of supply shortage in the wake of growing political tensions in the Middle East. It recommended an increase of Rs8.99 per litre in the price of high-speed diesel. If the recommendation is approved by the government, the price of diesel will go up to Rs133.32 per litre from the current Rs122.32, a hike of 6.2%.

Cheaper RON 80-82 petrol to hurt motorcycle industry

High-speed diesel is widely used in transport and agriculture sectors. A hike in its price will lead to a rise in inflation, which is already high due to increase in prices of gas and electricity.

According to Ogra’s recommendation, the price of motor spirit (petrol) should go up by Rs8.53 per litre (7.8%). If the proposed increase is approved, the price of petrol will go up from the current Rs108.42 to Rs116.95 per litre.

Petrol is widely used in vehicles. Compressed natural gas (CNG) is an alternative of petrol in Punjab where CNG retail outlets rely on imported gas supply. Owing to a narrow difference between petrol and CNG prices, the demand for the former has increased. Therefore, the consumers in Punjab will suffer following the proposed price hike.

Ogra also recommended an increase of Rs1.69 per litre (1.7%) in the price of kerosene oil. If the recommendation is endorsed, the price of kerosene oil will go up to Rs98.46 per litre. Kerosene is used in those areas of the country where liquefied petroleum gas (LPG) is not available for cooking purposes.

Petrol price likely to go up by Rs9 before Eid

Ogra proposed an increase of Rs1.68 per litre (1.7%) in the price of light diesel oil (LDO). The new price of LDO, if approved, will be Rs88.62 per litre compared to the current Rs86.94 per litre. LDO is used in the industry.

The regulator sent the summary for increase in petroleum product prices to the Petroleum Division on Thursday but sources said the government, instead of raising prices, was likely to bring down the general sales tax (GST) and petroleum levy in order to absorb the impact before Eid. Ogra has calculated ex-refinery sale prices of petroleum products at the standard 17% GST.

Published in The Express Tribune, May 31^st, 2019.

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