Following Eid festivities, the government gave citizens some more to digest: a rise in oil prices by up to Rs4.40 per litre, effective from Thursday (today).
The government had kept oil prices unchanged by absorbing the hike in the petroleum levy on August 16, following the directives of President Zardari till August 31, 2012. However, the state-owned Pakistan State Oil (PSO) notified an increase in prices of petroleum products in the deregulated oil pricing mechanism, following the directives of the petroleum ministry on Wednesday.
The price of petrol has been raised by Rs3.21 per litre, HOBC by Rs4.85 per litre, kerosene oil by Rs3.52 per litre, HSD by Rs4.40 per litre, LDO by Rs3.19 per litre, JP-1 by Rs3.48 per litre, JP-4 by Rs3.47 per litre, JP-8 by Rs3.48 per litre and E-10 by Rs3.21 per litre.
Following the move, the price of petrol has gone up to Rs96.78 from Rs93.57 per litre, HOBC to Rs125.01 from Rs120.16 per litre, HSD to Rs106.19 from Rs101.79 per litre, LDO to Rs93.30 from Rs90.11 per litre, kerosene oil to Rs96.35 from Rs92.83 per litre, E.10 to Rs94.28 from Rs91.07 per litre, JP-1 to Rs85.84 from Rs82.36 per litre, JP-4 to Rs77.51 from Rs74.04 per litre and JP-8 to Rs85.53 from Rs82.05 per litre.
The move comes just a week after the announcement to keep the price unchanged to earn extra revenue on account of the rise in petroleum levy. According to a press release issued on August 15, the Oil and Gas Regulatory Authority (Ogra) had notified to keep the oil prices unchanged till the end of August, following a fortnightly basis of the review in prices mechanism.
Now the weekly review of the oil prices mechanism has been implemented in line with the petroleum ministry’s directives, sources said, adding that the Economic Coordination Committee (ECC) had decided to implement the oil pricing mechanism on a weekly basis from September 1, 2012. Ogra had strongly opposed the review of oil prices on a weekly basis, fearing that hoarders would mint money by stockpiling oil and create an artificial shortage in the market. But the petroleum ministry wanted to implement the weekly pricing mechanism to back refineries.
A senior official of the ministry said that the finance ministry had pressed them to hike oil prices to avoid revenue losses on account of the increase in petroleum levy. “The finance ministry had estimated that it would lose revenue of Rs2 billion in two weeks from August 16 to 31,” an official said, adding that the government would now pocket Rs1 billion in the space of a week due to the rise in prices.
The All Pakistan CNG Association (APCNGA) and the government have an agreement regarding Compressed Natural Gas (CNG) prices. According to the agreement, the prices of CNG are linked with 60% parity of the petrol price. Hence, the increase in petrol prices has caused a hike in prices of CNG in both region-1 and region-2. Prices have been raised to Rs88.61 from Rs85.67 per kg in region-1 and Rs80.94 from Rs78.26 per kg in region-2.
Published in The Express Tribune, August 23rd, 2012.