Ignoring OGRA’s proposal, govt leaves oil prices unchanged

Regulator recommended a reduction in line with global trend.

ISLAMABAD: The government on Monday turned down a proposal of the Oil and Gas Regulatory Authority (Ogra) to reduce petroleum product prices in line with the decline in global crude prices and kept most of the prices unchanged.

However, the price of light diesel oil (LDO) was cut by Rs1.31 per litre, effective from Tuesday, says an announcement.

Prices of petrol and high-speed diesel (HSD), which are used by most of the consumers, have not been slashed in line with the global trend. Diesel demand from farmers is expected to stay high as the Kharif crop planting season is currently going on.

Earlier in a summary sent to the federal government, Ogra had proposed a cut of Rs1 per litre in the price of petrol, Rs1.31 in HSD, Rs4.89 in high octane blending component (HOBC), Rs2.13 in kerosene oil and Rs1.64 in LDO.

However, the Ministry of Finance rejected the proposal apparently in a bid to earn more revenue on account of petroleum levy, a government official said.

On petrol, the levy had been increased from Rs8 to Rs8.86 per litre, HOBC from Rs7.62 to Rs11.84 per litre, kerosene oil from Rs3.32 to Rs5.15 per litre, LDO from Rs2.72 to Rs3 per litre and HSD from Rs3.07 to Rs4.20 per litre, he said.

“The government will likely collect Rs1.5 billion in additional revenue in May due to increase in rates of petroleum levy,” the official said, adding total revenue collection from sale of petroleum products for the month was estimated at Rs24 billion including Rs6 billion from petroleum levy and Rs18 billion from general sales tax (GST).

In the latest announcement, the price of petrol has been kept at Rs103.36 per litre, HSD at Rs107, kerosene oil at Rs99.95 and HOBC at Rs135.81. Following a reduction of Rs1.31, LDO price stands at Rs97.43 per litre.

In a statement, Petroleum Secretary Mohammed Ejaz Chaudhry said the government left unchanged ex-depot sale prices of petroleum products because of dynamics of the international market for the month starting May 1.

He reminded that the government had provided relief to the consumers by slashing prices of kerosene oil, motor spirit (petrol) and HSD from April 4 through a reduction in petroleum levy.