Energy costs: Fuel prices to remain unchanged in May

Govt imposes higher taxes on petrol and diesel to keep prices steady

ISLAMABAD: The government on Thursday announced that it would keep fuel prices steady for the next month by increasing sales taxes on some petroleum products and decreasing them for others during the month of May.

Speaking to the media in Islamabad, Finance Minister Ishaq Dar said that prices would remain unchanged despite the recommendations of the Oil and Gas Regulatory Authority that prices be decreased for petrol and high speed diesel (HSD).



Ogra had recommended a Re1 per litre, or 1.3%, decrease in the price of petrol, from the current Rs74.29 per litre. That price will now remain unchanged. In addition, Ogra recommended a Rs1.06 per litre, or 1.3%, reduction in the price of HSD, which now stay pegged at Rs83.61 per litre. Both prices were kept constant by imposing higher taxes.

OGRA had also recommended increases for prices of High Octane Blended Component (HOBC), a fuel used in luxury cars, by as much as Rs9.43 per litre, or 11.8%, from the current Rs80.18 per litre. It had also recommended a Rs2.11 per litre, or 3.4%, increase in the price of kerosene, which will now remain unchanged at Rs61.44 per litre. Ogra also recommended a Rs3.38 per litre, or 5.8% increase in the price of light diesel oil (LDO) which currently stands at Rs57.94 per litre.

Prime Minister Nawaz Sharif gave the approval to keep prices constant for the month of May. Dar tried to make it sound like a populist move, drawing attention to the government’s decision to prevent an increase in the prices of HOBC, LDO and kerosene. But petrol and HSD are the most used fuels in the country, for which prices would have fallen had the government not intervened to impose higher taxes.

Published in The Express Tribune, May 1^st, 2015.