Petrol, diesel become dearer by almost Rs20

Increase comes as govt has a few days left in office

ISLAMABAD:

With a few days left in office, the government on Tuesday jacked up the prices of petroleum products by a staggering Rs19.95 per litre with immediate effect (August 1).

The term of the incumbent regime is scheduled to end on Aug 12.

In his televised remarks, Finance Minister Ishaq Dar maintained that the decision was made "in the national interest" as he announced that the cost of High Speed Diesel (HSD) was being increased by Rs19.90 to Rs273.40 per litre while that for petrol was hiked by Rs19.95 to Rs272.95 per litre.

He said the new rates were effective immediately.

Earlier, petrol was being sold at Rs253 per litre whereas diesel at Rs253.50 per litre.

Dar explained that the hike was due to the increase in the prices in the international market over the last 15 days.

He also stressed that his team had tried to "work" on the Oil and Gas Regulatory Authority's (Ogra) recommendations until the wee hours of the night but found themselves with their backs against the wall.

“The basic reason behind the delay in the announcement was that we were looking for ways to reduce the price, but there was no room for that,” he said, adding that Prime Minister Shehbaz Sharif had also been taken into confidence and that the approval came albeit with reluctance.

Petrol is used in motorbikes and cars whereas diesel is widely used in transport and agriculture sectors.

The government is currently charging the highest-ever rate of petroleum levy from the consumers.

It was charging Rs62 per litre petroleum levy on direct sale of petrol, Rs52.15 per litre on HOBC, Rs0.05 per litre on kerosene oil, Rs57 per litre on HSD and Rs33.37 per litre on E-10 gasoline.

However, it was charging zero petroleum levy on light diesel oil (LDO).
So, the government was charging highest rates of petroleum levy on two key products – petrol and diesel.

The regulator had also slashed the rate of inland freight equalisation margin (IFEM) that was negative of Rs1.36 per litre on HSD.

It allowed Rs2.63 per litre IFEM on petrol, Rs5.68 per litre on kerosene oil, Rs4.73 per litre on LDO and Rs 0.54 per litre IFEM on E-10 gasoline.

The price of kerosene oil stands at Rs 192.38 per litre.

The Pakistan State Oil (PSO) had asked for taking weighted average premium on imports at $10.43 per barrel to determine the price of petrol to which the government agreed.

The PSO had also asked for making adjustments of Rs2.60 per litre to include in price computation on account of Sindh Infrastructure Cess. However, the demand was turned down by the regulator.

Meanwhile, Federal Minister for Information and Broadcasting Marriyum Aurangzeb noted that the incumbent government had “responsibly managed” the agreement with the International Monetary Fund (IMF) and taken decisions to raise petroleum products prices ignoring the "political cost".

On the contrary, the previous regime violated the agreement with the IMF just for political gains, she said while addressing a news conference after inauguration of the Foreign Media Digital Wall of Digital Electronic Media Unit at the Directorate of Electronic Media and Publications in the federal capital.

“The government's tenure will end in a few days, but we have prioritised the state over politics. In contrast, (PTI chief) Imran Khan, who was certain about the end of his government, subsidised petroleum products and violated the IMF agreement which inflicted massive damage on the economy,” she maintained.

The minister observed that the present coalition government did not take decisions for petty political advantages, rather the same were made in the larger national interest.

(With input from APP)