Temporary relief: Oil prices kept unchanged for two weeks

Govt to lose Rs2b revenue due to hike in global oil rates.

ISLAMABAD: Despite rise in global oil prices the government has decided to keep oil prices unchanged for the next two weeks following direction of President Asif Ali Zardari.

“Government would have to lose Rs2 billion revenue due to adjustment of hike in global oil prices in petroleum levy (PL) on petroleum products to provide relief to consumers,” a senior official of petroleum ministry said.

Oil and Gas Regulatory Authority (Ogra) had worked out hike in oil prices up to Rs4.40 per litre in line with increase in global prices effective from August 16, 2012.However, the president had directed the petroleum and finance ministries to keep oil prices unchanged during Ramazan.

The government had increased oil prices by up to Rs6.67 per litre effective from August 1 following rise in global oil prices.

In another move, the government has decided to implement oil pricing review on a weekly basis from September 1, for three months. The Economic Coordination Committee (ECC) in its meeting held on August 7 had given a go-ahead to implement oil price reviews on a weekly basis.

Sources told The Express Tribune that the authorities of petroleum ministry wanted to implement weekly review mechanism with immediate effect but Ogra had opposed it fearing that it would result in shortage of petroleum products due to hoarding of products.

After the decision of government to keep oil prices unchanged, the price of petrol will stand at Rs93.57, HOBC Rs120.16, kerosene Rs92.83 per litre, HSD Rs101.79 per litre, LDO Rs90.11 per litre. The price of jet fuels will remain at current levels – JP-1 Rs82.36 per litre, JP-4 Rs74.04 per litre and JP-8 Rs82.05 per litre.

However, airlines will not be given a reprieve, as the price of jet fuel has been increased on the proposal of Ogra.

Price of the JP-1 category has gone up from Rs82.36 to Rs85.84. The price of the JP-4 category was raised from Rs74.04 to Rs77.51, while the price of the JP-8 category has seen an upward revision of Rs85.53 from Rs82.05.

Published in The Express Tribune, August 16^th, 2012.