ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) recommended on Thursday three to 10 per cent reduction in the prices of petroleum products for August but the government is likely to keep them unchanged through an increase in tax rates.

In a summary sent to the ministries of petroleum and finance, Ogra said the international prices of oil products had dropped in July because of positive sentiment around Iran nuclear agreement.

Also read: Ogra slaps Rs17.8m fine on five oil marketing companies

Based on existing tax rates and PSO purchases from international market, Ogra recommended a reduction of Rs2.69 per litre (3pc) in the ex-depot price of petrol for August to Rs75.10 from the existing rate of Rs77.79 per litre.

Govt likely to keep fuel prices unchanged through increase in tax rates

It recommended the price of high speed diesel (HSD) at Rs81.63 per litre instead of Rs87.11 per litre with a reduction of Rs5.48 per litre (6pc).

The ex-depot price of kerosene oil was recommended to go down by Rs6.33 per litre (10pc) to Rs58.61 per litre from Rs64.94.

Ogra proposed the price of high octane blending component (HOBC) at Rs82.81 per litre with a decrease of Re1 per litre and that of light diesel oil at Rs55.18 per litre, down by Rs6.33 per litre or 10pc from Rs61.51 per litre.

The authority recommended jet fuel (JP-1) price at Rs49.33 per litre, with a decrease of 12pc or Rs8.48 per litre in the existing rate of Rs55.81 per litre.

A finance ministry official said the prime minister had kept the oil prices unchanged last month despite a revenue loss of around Rs2.5 billion to ensure price stability ahead of Eidul Fitr.

He said the government would be justified in recouping the revenue loss in August to remain on the course to achieving revenue target set in the budget for current fiscal and that too without putting any additional burden on consumers.

He said the rate of petroleum levy and general sales tax would be increased to maintain oil prices at the existing level but a final decision would be made with the approval by the prime minister.

Petrol and high speed diesel (HSD) are the major products which generate most of revenue in the oil sector. The HSD sales in the country are estimated at over 600,000 tons per month and petrol consumption at 400,000 tons per month whereas HOBC and kerosene sales are estimated at less than 10,000 tons per month.

Published in Dawn, July 31st, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play