Pakistan

Weekly review: Petrol price may go up by Rs7.77 per litre

CNG prices are likely to remain unaffected by hike.

Zafar Bhutta August 30, 2012

ISLAMABAD:

Consumers are likely to face a Rs7.77 per litre hike in petrol prices from September 1, in line with the increase in global oil prices.

According to sources in the Pakistan State Oil (PSO), the price of petrol will touch the Rs101.34 per litre mark if the finance ministry refuses to absorb the price hike next month.

The new deregulated oil pricing mechanism, effective since August 23, allows PSO to set prices for all petroleum products, save kerosene and E-10, while the petroleum ministry notifies the petroleum levy (PL) for the products.

The Oil and Gas Regulation Authority (Ogra) recommended that the government absorb the hike in oil prices through the PL in order to relieve consumers. Sources in the finance ministry, however, say the authority has been asked to refrain from recommending any such action.

“Ogra has been asked to monitor prices and submit a quarterly report with an oil pricing analysis to the Economic Coordination Committee (ECC) of the cabinet,” the finance ministry sources said.

According to PSO’s calculations, the price of petrol will increase by Rs7.77 per litre, High Octane Blending Component (HOBC) by Rs8.18 per litre, kerosene by Rs5.84 per litre, High Speed Diesel (HSD) by Rs5.94 per litre and Light Diesel Oil (LDO) by Rs5.54 per litre.

After the proposed hike, petrol will cost Rs104.55 per litre from Rs96.78, HOBC Rs133.19 from Rs125.01, HSD Rs112.13 from Rs106.19, LDO Rs98.84 from Rs93.30 and kerosene Rs102.19 from Rs96.35 per litre.

While compressed natural gas (CNG) prices are supposed to maintain 60 per cent parity with petrol prices, a petroleum ministry official said the government will not be able to increase the price of CNG following the hike in petrol price.

“The government is already charging the maximum rate set by the Gas Infrastructure Development Cess (GIDC) and therefore has no space to increase prices further,” the official told The Express Tribune.

Currently, the government charges Rs300 per million British thermal unit (mmbtu) for CNG consumers in region-1 and Rs200 mmbtu for region-2. These are the maximum rates approved by the parliament. The only way the government can hike CNG prices is by increasing gas costs.

“However, the government cannot raise gas prices since it is Ogra’s responsibility to determine the hike in rate following petitions from gas utilities Sui Northern Gas Pipelines Limited and Sui Southern Gas Company Limited,” sources told The Express Tribune. They added that the National Accountability Bureau is already investigating the gas pricing formula implemented by the government.

Some industrialists have already obtained stay orders from different courts against GIDC implementation as well.

Published in The Express Tribune, August 31^st, 2012.

COMMENTS (6)

Nouman Khan | 11 years ago | Reply Dear Chief Justice, Please take action against this petrol hike, instead of asking them to write letter to Swiss etc...... I hope you would understand the pain of people of Pakistan more than the pain of opposition.

casim | 11 years ago | Reply

not surprised to see this, Government is virtually being run via Rs 30 per litre tax from petroleum products! We Pakistanis are just fools & praised the Govt for cutting down the petrol prices a while ago, but in reality they were cutting down the petrol price while they kept on increasing the per unit electricity cost, hence there was NO relief passed on to common man in reality. Thank you dear Democracy :)