ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Tuesday recommended a Rs3.20 and Rs2.30 per litre cut in the prices of high speed diesel (HSD) and petrol, respectively, from June 1.

On the other hand, Ogra recommended a Rs11.60 and Rs9.50 per litre increase in the prices of kerosene and light diesel oil respectively.

In a summary sent to the government, the regulator said the adjustment in diesel and petrol prices was required to pass on the impact of drop in the international prices during May as benchmark crude oil eased to $50-52 per barrel.

On the basis of existing tax rates and imported cost, Ogra calculated the new ex-depot HSD price at Rs79.80 per litre from the current Rs83 for next month. Likewise, it revised down petrol price at Rs71.70 per litre from Rs74.

In contrast, Ogra recommended an increase of Rs11.60 in ex-depot price of kerosene at Rs55.60 per litre. Also, it proposed a Rs9.50 hike in the price of light diesel oil (LDO) to Rs53.50 per litre.

An official said the regulator had calculated the prices on the basis of imports made by Pakistan State Oil (PSO) in May and notified GST and petroleum levy rates on all products.

Finance Minister Ishaq Dar is expected to announce a formal government decision after consulting the prime minister on Wednesday. An official said the government was likely to keep the prices unchanged on price stability grounds and raise a few billions in tax revenue direly needed at the fag-end of the fiscal year to minimise fiscal deficit.

Last month too, Ogra had recommended a Re1 per litre cut in the prices of petrol and HSD but the government did not oblige and kept the prices unchanged.

The Ministry of Petroleum and Ogra have been recommending for many months a substantial increase in the prices of kerosene and LDO to minimise a huge price differential with petrol.

The ministry believed that a Rs30 per litre price differential between petrol and the two other products was encouraging dishonest market operators to mix kerosene with petrol for higher profits and resulting in adulterated and poor quality petrol in the market instead of higher grade (92RON) being charged to consumers. The government has been rejecting these calls saying it wanted to protect poor people.

Published in Dawn, May 31st, 2017