Ogra proposes up to 24 percent increase in petroleum products

ISLAMABAD: The regulatory authority has proposed the government to increase prices of various petroleum products from five to 24 percent for January 2018.

In a summary sent to the ministry of energy (petroleum division), which would be forward to the finance ministry and the Prime Minister House for final approval, the Oil and Gas Regulatory Authority (Ogra) has recommended an increase of Rs4.06/litre (5.2 percent) in price of petrol, Rs6.03/litre (16 percent) in high-speed diesel, Rs13.58/litre (23.6 percent) in superior kerosene and Rs12.49/litre (24 percent) increase in the price of light diesel oil (LDO).

If the government approves the recommendations, petrol price will go up to Rs81.53/litre from the existing Rs77.47/litre. Likewise, prices of superior kerosene will go up to Rs71.16/litre from the existing Rs57.58/litre and that of light diesel oil will rise to Rs64.61 from the existing Rs52.12/litre.

After deregulation of high-speed diesel, the increase in Pakistan State Oil (PSO)’s weighted average ex-refinery price of HSD along with its Inland Freight Equalisation Margin (IFEM) has been worked out with effect from January 2018.

The PSO increased ex-refinery price of HSD by Rs5.83/litre and increase of 21paisas/litre in freight rates. After the increase, the weighted average price of HSD will go up to Rs57.10 from the existing Rs51.27 and IFEM’s price will be increased to Rs1.46 from Rs1.26/litre.

The government has also deregulated margins of oil industry on HSD and would determine its price based on weighted average price of PSO.

For the last couple of years, after reduction in global crude oil prices, the government had burdened petroleum consumers with general sales tax and petroleum levy. Ogra proposed GST rate on various products at 17 percent to maintain price stability and earn higher revenue.

On the authority’s recommended prices, the Federal Board of Revenue (FBR) will charge 17 percent GST on petrol, including LDO and superior kerosene. Apart from 17 percent GST, the government is also charging petroleum levy of up to Rs10 on prices of oil products.

The budgeted petroleum levy is Rs 10/litre on petrol, Rs 6/litre on superior kerosene and Rs3/litre on LDO.