POL products prices may be raised by Rs28.44

Finance Division to move a summary today for an estimated 11% hike in POL prices with effect from August 1

ISLAMABAD:

The Oil and Gas Regulatory Authority (OGRA) has worked out up to Rs28.44 per litre raise in the prices of petroleum products with effect from August 1.

Sources in the regulatory body disclosed that based on the current rate of petroleum levy (PL), the estimated ex-depot price of petrol may climb up by Rs6.53 per litre, high-speed diesel (HSD) by Rs28.44 per litre, kerosene oil (SKO) by Rs11.02 per litre and light diesel oil (LDO) by Rs5.64 per litre.

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The Finance Division will move a summary on Saturday (today) seeking up to an estimated 11 per cent hike in petroleum prices with effect from August 1. As usual, the final decision in this regard will be taken by the prime minister.

Similarly, the price of petrol and HSD will go further up if the government includes Rs7 per litre petroleum dealer's margin in the pricing structure. A day earlier, the Economic Coordination Committee (ECC) had approved the increased margin of petroleum dealers. The Petroleum Division had assured the dealers the government will implement the margin with effect from August 1, 2022.

These estimated prices would take the rate of petrol up from Rs230.24 to Rs236.77 per litre, HSD from Rs236.00 to Rs264.44 per litre, SKO from Rs196.45 to Rs207.47 per litre and LDO from Rs191.68 to Rs197.32 per litre.

It is noteworthy that the increase in the prices of petroleum products is in line with the hike in their international price.

At present the PL on petrol stands at Rs10 per litre, on HSD, SKO and LDO at Rs5 per litre each while sales tax is zero.

In this regard, the National Assembly has approved a rise in the maximum limit of PL from Rs30 per litre to Rs50 per litre in order to achieve the budgetary target of Rs750 billion set in the Finance Bill 2022-23.

However, sources in Petroleum Division were of the view that the government was unlikely to fetch Rs750 billion from PL in the current financial year at the current rate as that would mean a maximum collection of Rs14 billion per month.

Additionally, a revenue shortfall of Rs45 billion per month was likely if the 17 per cent general sales tax (GST) is not slapped on these products.