ISLAMABAD, Oct 16: The government on Thursday imposed petroleum development levy on diesel and kerosene and increased its ratio on petrol and high octane blending component (HOBC).

A source told Dawn that the decision would help the government earn an additional amount of Rs3.5 billion a month.

According to a notification issued by the Oil and Gas Regulatory Authority, a levy of Rs3.27 per litre has been imposed on light diesel oil and Rs0.84 on kerosene.

The levy has been increased from Rs23.37 to Rs30.51 on the HOBC sold at retail outlets and from Rs25.47 to Rs32.61 sold directly to consumers by oil companies. It has been increased from Rs17.57 to Rs23.12 on premium motor petrol sold at retail outlets and from Rs19.52 to Rs25.07 sold by companies directly to consumers.

The decision came at a time when the government was expected to pass on the benefit of a phenomenal decline in international crude prices to consumers.

People were expecting a decrease of at least Rs5 per litre in petrol and diesel prices after international rates fell below $67 a barrel on Thursday from $100 a month ago.

However, the government has reduced by Rs9.25 per litre prices of jet fuel, which is used by airlines and the army.

Before the decline in international prices, the government was paying a subsidy of Rs8.21 per litre on kerosene, Rs7.41 on light diesel oil and Rs6.42 on high speed diesel.

After the Sept 15 price review by Ogra, the subsidy given by the government on petroleum products has declined to Rs2.5 billion a month from Rs4 billion.