The government on Saturday increased the prices of petroleum products by up to Rs3 per litre effective from January 16.
The finance division in a statement said that the petroleum products were showing a fourth straight weekly gain and witnessed an increase of 6.2% just in the last week in the international market.
“The existing sales tax rate and petroleum levy on various petroleum products are much below the budgeted targets,” it added.
“Against the recommendation of OGRA [Oil and Gas Regulatory Authority] for an increase of Rs5.52/litre in petrol and Rs6.19/litre in HSD [high-speed diesel] prices, the prime minister has directed to absorb the international prices through a further cut in sales tax from last fortnight.”
The statement added that the finance ministry would take a hit of Rs2.6 billion revenue because of reduced sales tax.
“Therefore, the government has decided to make [a] partial increase in the prices of the petroleum products in order to provide relief to the end consumers. The new prices of petroleum products with come into effect from January 16, 2022.”
Read more: Govt cuts petrol, diesel prices by Rs5
The government has hiked price of petrol by Rs3.01 per litre from Rs144.82 to Rs147.83 per litre.
Petrol is used in cars and motorcycles. It is also an alternate to CNG.
During the winter season, the CNG stations in Sindh and Balochistan have been shut down. Therefore, the demand for petrol is likely to increase.
The government has also increased the price of HSD by Rs3 per litre from Rs141.62 to Rs144.62 per litre.
This fuel is widely used in transport and agriculture sectors. Therefore, the increase in its price will impact the lives of the people because of a possible increase in inflation.
The price of kerosene oil has also witnessed an increase of Rs3 per litre, taking its rate from Rs113.48 to Rs116.48 per litre.
Kerosene oil is used in remote areas for cooking purpose where LPG is unavailable.
The major user of this fuel is also the army in the remote areas of Pakistan like the country’s northern parts.
Also read: Petroleum prices likely to go up again as govt increases PDL
The price of light diesel oil has also gone up by Rs3.33 per litre from Rs111.21 to Rs114 54 per litre. This fuel is used in industries.
Petroleum prices are a major component of the country’s inflationary calculations.
At the start of the current year, Prime Minister Imran Khan had given the nod to an increase in oil prices by up to Rs4 per litre.
According to a notification issued by the Finance Division back then, the price of petrol and HSD would rise by Rs4 per litre for the first 15 days of January 2022.
After the increase, the price of petrol went up from the previous Rs140.82 per litre to Rs144.82 per litre. The price of HSD jumped to Rs141.62 per litre from the previous Rs137.62 per litre.
The rate of kerosene oil was increased by Rs3.95 to Rs113.53 per litre as against Rs1209.53 per litre.
The price of LDO had shot up to Rs 111.06 per litre from Rs107.06 registering a hike of Rs 4.15 per litre.
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