ISLAMABAD: The prices of petroleum product in the country could increase by up to 19.9 per cent in July due to a rise in global crude oil prices.
The ministry received a summary from the Oil and Gas Regulatory Authority (Ogra) on Wednesday that recommended an upward revision in oil prices as international crude rates increased.
Prices of all petroleum products, except for kerosene oil, are deregulated and Ogra only monitors their prices. The government has the capability to absorb the impact of proposed increase in oil prices by adjusting tax rates on petroleum products.
Despite a decline of over 50% in global prices, consumers have largely been denied a full relief in previous months due to hefty taxes to avoid revenue loss to the government. At present, two types of taxes are being charged from the oil consumers, including petroleum levy and general sales tax.
The Ministry of Finance may oppose any proposal for keeping oil prices unchanged in the latest revision as it would affect the country’s revenues. The final decision will be taken by Prime Minister Nawaz Sharif.
Following the rise in global oil prices, the effect will be felt in prices of petrol, high-speed diesel (HSD), light diesel oil (LDO), kerosene oil and high octane blending component (HOBC).
According to Ogra’s summary, petroleum ministry officials said the consumers of HSD, which is mostly used in the transport and agriculture sectors, may face a hike of Rs3.75 (5.2 %) which would take the price to Rs76.27 per litre from the existing Rs72.52.
The price of petrol may go up from the existing Rs64.27 to Rs66.20 per litre, an increase of Rs1.93 (3 %).
The price of kerosene oil, used for cooking purposes in remote areas where liquefied petroleum gas is not readily available, may be increased from Rs43.25 to Rs51.87 litre with an increase of Rs8.62 (19.9%).
Similarly, LDO, mainly used for industrial purposes, may record an increase of Rs5.38 (14.2%), meaning the price will go up from Rs37.97 to Rs43.37 per litre.
The price of HOBC, mainly used in luxury cars, may rise by Rs3.53(4.9 percent)taking the rate to Rs76.21from Rs72.68 per litre.
