KARACHI: Diesel and petrol might spike by Rs51 and Rs21 respectively in the next fortnightly revision, if the new setup unfroze the petroleum prices, frozen by the previous government to support inflation-broken masses, The News learnt on Thursday.
According to a summary of Oil & Gas Regulatory Authority (OGRA), the new prices of petroleum products have been worked out for next fortnight.
Government is paying Rs41/litre as price differential claim (PDC) on diesel and Rs24 on petrol in the current fortnight.
On February 28 this year the former Pakistan Tehreek-e-Insaf (PTI) led regime scrambled to cap the prices of these two fuels till budget (FY2023) to calm down the angry consumers.
According to summary of Ogra, the new price of diesel has been calculated at Rs.195 for diesel compared to current level of Rs 144 per litre presently.
The new price of petrol had been working out at Rs.171 for next fortnight compared to Rs.149/litre currently.
The new prices calculated by Ogra don't include Petroleum Levy and Sales Tax, which are at zero level. Of levy and tax are included the price would go manifold in next fortnight.
Spiking global petroleum markets have led to a sharp hike in local prices and the government, without charging any tax or levy, is bearing the cost of subsidies of billions of rupees to maintain the prices at lower levels.
The average price of crude oil came to $107/barrel in the global market during the fortnight, whereas the average price of diesel was $138.9/barrel and average price of petrol reached $116.14/barrel.
According to a top official of an oil company, the government doesn’t seem to be increasing the prices of petroleum products as it cannot afford to raise the prices immediately after coming into power because of fear of public backlash.
He however suggested the government should not pass on the full impact and raise only Rs10 for each fortnight as delay in the payment of PDCs was plunging the sector into a financial crunch.
Oil sector representative body Oil Companies Advisory Council (OCAC) in a letter to the government pointed out that allocation of funds for April 1-15 fortnight PDC payments were yet to be approved and previous fortnight’s dues were still outstanding.
It said that Rs11.73 billion PDC allocated for March 16-31, 2022 had been approved but not transferred to the assignment account managed by Pakistan State Oil for onward payment to individual OMCs.
Majority of the industry’s claims for March 16-31, 2022 have already been submitted with OGRA but to no avail, the OCAC added.
The council said if not addressed urgently, this conundrum would further choke the industry’s cash flow and diminish its capacity to meet the country’s demand and add to the supply pressures.
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