Govt keeps POL rates unchanged

Dar says OGRA worked out increase in prices, but PM refused to budge

ISLAMABAD:

The government on Saturday announced that oil prices would remain unchanged effective from January 1, 2023.

It decided to leave the prices of petrol and high speed diesel (HSD) unchanged at the current levels for the first half of January 2023.

Finance Minister Ishaq Dar expressed gratitude to the prime minister for taking the decision.

The current price of HSD is Rs227.80 per litre and petrol Rs214.80 per litre.

The current price of kerosene oil is Rs171.83 per litre and light diesel oil (LDO) Rs169 per litre.

The HSD is widely used in agriculture and transport sectors.

The kerosene oil is used for cooking purpose mainly in areas where LPG is not available for cooking. Pakistan Army is its main user in the northern parts of the country.

These prices will also remain the same up to January 15, 2023.

The minister in his televised addressed to the nation on the state-run electronic media highlighted that the oil prices were on the rise in the international markets, informing about the calculations made by the Oil and Gas Regulatory Authority (Ogra) in this regard.

The minister said that the Ogra had calculated an increase of Rs8.76 per litre in the price of kerosene oil to Rs180.59 per litre from the existing rate of Rs171.83.

Similarly, for the LDO, Ogra suggested an increase of Rs7.96 to Rs176.73 per litre.

“The prime minister has taken this decision to maintain the oil prices in the wake of extreme cold as people use kerosene oil as fuel for heating and cooking,” Dar added.

The minister said that the price differential will be adjusted in the petroleum levy (PL) by the government, suggesting that revenue collections at oil products would be less in the first fortnight of January 2023.

On the other hand, the oil products have witnessed a declining trend in the country and it will be witnessed in the month of January too, industry sources said.

“Diesel sale in December 2022 was 510,000 tonnes, whereas the same was around 610,000 tonnes in December 2021. Similarly, petrol consumption too declined by around 100,000 tonnes to around 630,000 tonnes in December 2022,” a senior official of the petroleum industry said, adding that this decline had two main reasons – reduction in consumption due to high rates, and increased smuggling from Iran – that too because of price differential.

Currently, the PL at one litre of petrol has reached its upper cap of Rs50, while it was Rs35 for each litre of HSD sold, leaving space for the government to increase the levy and keep the prices unchanged.

Apart from the international oil rates, the serious impact faced by the oil marketing companies (OMC) in Pakistan was the fluctuating exchange rate.

The largest oil importer in the country is the state-owned Pakistan State Oil, and it was facing huge rupee-dollar exchange loss on the imports of petroleum products, and as the petroleum prices were kept unchanged, the OMCs could not recover the amount from the customers, thus creating a huge backlog to be paid by the government.