The Oil and Gas Regulatory Authority (Ogra) has recommended a hike in the price of petrol by Rs4.20 per litre to the federal government in line with fluctuation in global oil prices.
The new price, if approved, will come into effect from Wednesday (Jun 16). However, the price of high-speed diesel (HSD) may go down by Rs3.50 per litre.
HSD is widely used in transport and agriculture sectors. Therefore, a decision to lower its price will have a healthy impact on the consumers of these two major sectors.
The prices are based on existing rate of petroleum levy on HSD at Rs5.14 and petrol at Rs4.80 per litre.
Earlier, the government had announced it will maintain oil prices effective from June 1, 2021. The premier had decided to maintain the prices of petroleum products at the level of May 17, 2021 to provide relief to the consumers.
Also read: Govt keeps fuel prices unchanged
The government has not increased the prices of petroleum products since April 16, 2021, by adjusting sales tax and petroleum levy so that there is no corresponding increase in the prices of essential items and maximum relief is provided to the common man.
The government maintained the price of petrol at Rs108.56 per litre, HSD Rs110.76, kerosene oil Rs80 and LDO Rs77.65.
Earlier, Ogra had proposed increasing the price of HSD by Rs4.20 per litre and petrol by Rs3.5 per litre and moved a summary to the government for approval in the revision of oil prices.
The regulator calculates ex-depot prices of petroleum products keeping in view the rate of petroleum levy and general sales tax.
Petroleum products are a significant contributor to taxes as the government is currently charging double tax. It is charging a petroleum levy and general sales tax resulting in higher prices in the country.