Govt keeps petroleum prices unchanged

Cumulative revenue impact of the decision will be over Rs2 billion

ISLAMABAD:

The government on Monday decided to keep fuel prices unchanged for the next fortnight in a bid to provide relief to the consumers.

وزیراعظم عمران خان نے پیٹرولیم مصنوعات کی قیمتوں میں ردوبدل سے متعلق اوگرا تجویز کو مسترد کرتے ہوئے پیٹرولیم مصنوعات کی قیمتوں کو 31 مئی تک برقرار رکھنے کا فیصلہ کیا ہے۔وزیراعظم عمران خان بین الااقوامی سطح پر پیٹرولیم مصنوعات کی قیمتوں میں اضافے کا بوجھ عوام پر نہیں ڈالناچاہتے۔

— Farrukh Habib (@FarrukhHabibISF) May 17, 2021

In order to provide relief to the common man, Prime Minister Imran Khan has decided to maintain the prices of petroleum products as they were on May 1, 2021 and a fortnight before that.

The government has to adjust the petroleum levy and sales tax as well on kerosene oil (SKO) and light diesel oil (LDO) to maintain the same prices.

The government will bear a revenue loss of Rs2.77 billion for maintaining them.

The prices from May 18 onwards will be: petrol Rs108.56 per litre, HSD Rs110.76 per litre, SKO Rs80 per litre and LDO Rs77.65 per litre.

The Oil and Gas Regulatory Authority (OGRA) had recommended an increase in prices of petrol and high speed diesel (HSD) by Rs1.93 and Rs3.35 per litre, respectively.

The regulator had also suggested an increase in price of SKO by Rs3.90 and LDO by Rs2.91 per litre.

The regulator had moved a summary to the petroleum and finance divisions seeking approval of new oil prices in line with the proposed hike.

The government had slashed the prices of petroleum products up to Rs2.32 per litre effective from April 16, 2021.

The government had reduced the price of HSD by Rs2.32 per litre, petrol Rs1.79 per litre, SKO Rs2.06 per litre, and LDO Rs2.21 per litre.

The government had also reduced the prices of petroleum products from April 1 to 15, 2021.

The agriculture and transport sectors widely use HSD. Therefore, the decision to keep oil price unchanged will have a positive impact on these two sectors.

Ogra calculates ex-depot prices of petroleum products keeping in view the rate of petroleum levy and general sales tax.

Petroleum products are a major contributor to taxes as the government is currently charging double tax. It is charging a petroleum levy and general sales tax as well that result in higher fuel prices in Pakistan.