The Oil and Gas Regulatory Authority (Ogra) is expected to increase petroleum product prices by up to Rs1.15 per litre in line with the rise in international markets and new prices will take effect from August 1.
Sources told The Express Tribune that global oil prices jumped to $114 per barrel on July 26 against average price of $110 in the previous month, which will lead to an increase of up to Rs1.15 per litre in domestic oil prices.
However, sources said petroleum product prices would be finalised after taking into account average global crude prices for the whole month of July and the inland freight equalisation margin (IFEM).
According to calculations based on average global crude prices by July 26, high-speed diesel (HSD) price is expected to rise by Rs0.50 per litre, petrol Rs0.50 per litre, light diesel oil Re1 per litre, kerosene oil Rs0.90 per litre, Jet-4 Rs1.15 per litre and Jet-8 Re1 per litre. These prices do not include IFEM.
The government has deregulated prices of motor spirit, high octane blending component (HOBC), light diesel oil, JP-1, JP-4 and JP-8 from June 1 and refineries and oil marketing companies are allowed to fix prices of these products on a monthly basis keeping in view the import parity price. However, Ogra still announces prices of these products after consultation with refineries and marketing companies and considering their estimates.
The government has not yet deregulated IFEM, which will result in different prices across the country, contrary to the current uniform rates. Sources said the government was in a fix in the matter of deregulating IFEM because of opposition from different political parties.
On June 30, petroleum product prices were reduced by up to Rs3 per litre following the decline in global markets. However, HOBC price was increased by Rs2.21 per litre. The price of kerosene oil was not reduced as the government imposed a petroleum levy of Rs1.59 per litre on it.
Published in The Express Tribune, July 27th, 2011.
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