ISLAMABAD: Based on existing high rates, the Oil and Gas Regulatory Authority (Ogra) on Wednesday worked out up to 19.93 per cent increase in the prices of petroleum products for the month of July despite a fall in international prices.

An official said the government was likely to maintain all prices at the existing level to facilitate general public travelling ahead of Eidul Fitr next week. The prices could be brought down by up to 40pc if the general sales tax rate was revived to normal 17pc, he said hypothetically.

In a summary sent to the government, Ogra reported an increase in the international oil prices in major part of June which required to be passed on to the consumers unless the government cuts tax rates.

The crude prices in the Middle East, the source of Pakistan’s oil imports, had crossed $50 a barrel in first two weeks of June but then fell below $48 per barrel after third week. By this time, most of import shipments had already been booked, an official explained.

In its working paper, Ogra recommended an increase of 3pc in the price of petrol, 5.2pc raise in high speed diesel (HSD), 4.85pc in High Octane Blending Component (HOBC), 14.16pc in Light Diesel Oil (LDO) and 19.93pc jump in the price of kerosene.

Ogra forwarded its working paper to the government on the basis of existing tax rates under instructions from Finance Minister Ishaq Dar. A final decision about the adjustment in oil prices would be announced on Thursday.

Based on existing tax rates and PSO purchases from international market, Ogra worked out an increase of Rs1.93 per litre (3pc) in the ex-depot price of petrol (motor gasoline) for June to Rs66.20 per litre from Rs64.27.

The regulator estimated the ex-depot sale price of HSD to go up by 5.17pc or Rs3.75 per litre to Rs79.27 per litre instead of Rs72.52 per litre.

It also worked out ex-depot sale price of light diesel oil at Rs43.35 per litre instead of Rs37.97 per litre, up Rs5.38 per litre or 14.16pc.

Likewise, Ogra calculated the price of high octane blending component at Rs76.21 per litre instead of Rs72.68 per litre, with an increase of Rs3.53 per litre or 4.85pc.

Ogra also recommended ex-depot sale price of kerosene to increase by Rs8.62 per litre (19.93pc) to Rs51.87 per litre from Rs43.25 per litre.

Currently, the government is collecting about Rs25 per litre taxes on petrol in the form a fixed sales tax and petroleum development levy. Similarly, the government is collecting about Rs38 per litre tax on HSD.

Petrol and high speed diesel are the two major products that generate most of revenue in oil sector. The HSD sales across the country are average 600,000 tonnes per month against monthly consumption of around 400,000 tonnes of petrol while kerosene sales are less than 10,000 tonnes per month and that of HOBC less than 6,000 tonnes per month on average.

Published in Dawn, June 30th, 2016