The government has increased prices of three major petroleum products by up to five per cent in the wake of rise in crude prices in the international market and depreciation of rupee. The new rates will take effect from today (Saturday).
However, a plan to increase the price of compressed natural gas (CNG) by Rs4 per kg by imposing petroleum levy has been put on hold by the time approval for this comes from the Economic Coordination Committee (ECC).
“We want to devise a formula with ECC’s approval to charge petroleum levy on CNG if the gap between prices of petrol and CNG widens by more than 45 per cent,” Petroleum Minister Dr Asim Hussain said while talking to The Express Tribune.
At present, the difference between petrol and CNG prices is 45 per cent, which will widen after the fresh increase in petrol price by Rs4.15 per litre. Earlier, the petroleum ministry wanted to slap a petroleum levy of Rs5 per kg on CNG, but the proposal was withdrawn in the face of fierce resistance from CNG station owners.
On Friday, the maximum increase was made in the price of petrol, which came to five per cent compared to the price of September. The price of high octane blending component (HOBC) was increased by Rs2.72 per litre in line with the rise in global oil prices.
Though the price of high-speed diesel (HSD) had declined by Rs0.62 in the international market, the government raised the price by Rs1.51 per litre by increasing the petroleum levy.
After the price revision, diesel price rose from Rs92.65 to Rs94.16 per litre, HOBC from Rs109.93 to Rs112.65 per litre and petrol from Rs84.80 to Rs88.95 per litre. The government kept prices of light diesel oil and kerosene oil unchanged at Rs83.52 and Rs86.82 per litre respectively.
The Oil and Gas Regulatory Authority (Ogra) had already notified ex-refinery price of high speed diesel at Rs72.03 per litre, inland freight equalisation margin at Rs1.20, marketing companies’ margin at Rs1.62, dealers’ margin at Rs1.96, petroleum levy at Rs2.52 and general sales tax (GST) at Rs12.7. Though a decline of Rs0.62 was expected in the diesel price, the government increased it by enhancing the petroleum levy.
Average price of crude oil in the global market increased by $2 to $108 per barrel in September compared to $106 per barrel in the previous month. In the same period, the rupee weakened against the dollar to Rs87.52 against Rs86.7 in the preceding month.
From June this year, the government has deregulated prices of petroleum products including petrol, high octane blending component, light diesel oil, jet fuel JP-1, JP-4 and JP-8 and refineries and oil marketing companies are allowed to announce ex-refinery and ex-depot prices every month keeping in view the import parity price.
Published in The Express Tribune, October 1st, 2011.