ISLAMABAD: The federal cabinet in its last meeting on Thursday decided to keep the prices of petroleum products unchanged for a week and passed the buck on to incoming caretaker government.

The decision was taken on the request of Finance Minister Miftah Ismail to avoid a bad name for the PML-N on its last day in office, said an official. He said it was feared the media would blame the PML-N for a “petrol bomb” as a parting gift to the voters and hence decided to let the caretakers to take a decision.

This was given credence by the finance minister in an announcement. “Since our government ends today, and new prices of petrol, diesel and kerosene go in effect from tomorrow, therefore on Ministry of Finance’s recommendation the prime minister has decided to leave their prices unchanged till June 7, so that the incoming government can decide new prices,” said Miftah.

The Oil and Gas Regulatory Authority (Ogra) had proposed up to Rs12.50 per litre increase in the petroleum prices on the basis of artificially higher tax rates. In an order, the finance ministry has ordered calculation of prices on the basis of 31pc GST on high-speed diesel (HSD) and 17pc on all the other products. This is despite the fact that the notified GST rate on HSD at present was 27.5pc.

In addition, the government is also charging Rs8 per litre petroleum levy on HSD, Rs10 per litre on petrol and Rs6 and Rs3 per litre on kerosene and light diesel oil (LDO) respectively.

Based on existing tax rates and import prices reported by Pakistan State Oil (PSO), Ogra has worked out an increase of Rs12.50 per litre in the price of HSD, Rs8.35 per litre in motor gasoline (petrol), Rs8.23 per litre increase in kerosene and Rs11.65 per litre increase in the price of LDO.

Under the practice in vogue, oil prices are revised on the last day of every month. The petrol and HSD are two major products that generate most of revenue for the government because of their massive and yet growing consumption.

HSD sales across the country are now going beyond 800,000 tonnes per month against consumption of around 700,000 tonnes of petrol. The sales of kerosene and LDO are generally less than 10,000 tonnes per month.

Published in Dawn, June 1st, 2018