Over the last five months, international oil prices have increased by up to 26 per cent but only 5 per cent impact was passed on to consumers. – File Photo

ISLAMABAD: Petrol and diesel prices are estimated to increase by Rs7 and 10 per litre respectively if the government decides to pass on the full impact of international oil prices to consumers on March 31.

Sources close to the chairman of Oil and Gas Regulatory Authority (Ogra) told Dawn on Monday that a report on the international oil price situation had been submitted to the ministry of finance but had not been deliberated upon because Finance Minister Dr Abdul Hafeez Shaikh and Secretary Finance Dr Waqar Masood Khan were not in town.

The report said the prices of petrol and diesel have increased by 10 per cent and 12.2 per cent respectively in the first 25 days of the current month as the benchmark crude prices hovered around $111.2 per barrel in the Gulf market.

The sources said the government would have to absorb an additional burden of Rs8 billion in case the prices were maintained at the present level but it was left with limited options to do so because of difficult financial position, although political pressure playing a role could not be ruled out.

The sources said the government was required under the finance bill 2010-11 to collect Rs10 and Rs8 per litre as petroleum levy on petrol and diesel respectively but it was charging only Rs3.16 and 44 paisa per litre respectively, following an agreement with the Muttahida Qaumi Movement.

Over the last five months, international oil prices have increased by up to 26 per cent but only 5 per cent impact was passed on to consumers.

The government is reported to have suffered a revenue loss of Rs25 billion during four months — December to March.

Prime Minister Yousuf Raza Gilani who is holding the petroleum minister’s portfolio after the restructured federal cabinet, said these officials would take a decision about the price increase on Thursday, most probably after consulting the coalition partners and other political parties.

The sources said the government foresaw further rises in the international market because of expectations of fresh oil purchases by Japan and continued unrest in Libya and Bahrain.

Last month, the government initially increased petroleum prices by 9.9 per cent but had to reduce it to 5 per cent in line with the agreement with MQM.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.