ISLAMABAD: In the absence of a political leadership, the bureaucratic machinery of the state struggled to take a routine monthly decision to revise prices of petroleum products on the due date of July 31 and decided to keep them unchanged for the month of August.

The secretaries of petroleum, finance and law and justice spent more than 12 hours on Monday in consultations at times also touching base with the presidency for a direction whether or not to implement recommendations of the Oil and Gas Regulatory Authority (Ogra) issued last week.

Just before midnight, their daylong meetings and analyses of legal requirements concluded that the secretaries of finance and law and justice should take an amended summary to the president for approval to revise the prices, but it was declined. The secretaries for finance and petroleum did not respond to media calls and text messages.

Informed sources said it was legally difficult to change sales tax rates on petroleum products in the absence of a prime minister or the cabinet and hence it was decided to continue with the existing rates that would generate about Rs8 billion of additional windfall revenue. The government is currently charging 33.5 per cent GST on high speed diesel and 20.5pc on petrol.

Bureaucrats have a hard time arriving at a decision in the absence of political leadership

“No change in petroleum products prices till a decision by the competent authority,” said a spokesman for the finance ministry, adding that considering special circumstances, the prices would be maintained at the existing level till a decision by the competent authority.

Ogra and the petroleum ministry had kept their staff waiting in their offices till midnight for a notification.

Ogra had recommended a reduction of Rs5.07 per litre in the price of high speed diesel (HSD) and Rs3.67 in petrol effective from August 1 to pass on the benefit of lower international prices to consumers. It recommended an increase of Rs13 and Rs10 per litre in the prices of kerosene and light diesel oil (LDO), respectively.

On the basis of existing tax rates, Ogra calculated the new ex-depot price of HSD at Rs74.83 per litre instead of Rs79.90 and that of petrol at Rs67.63 instead of Rs71.30. In contrast, the regulator recommended an increase of Rs13 per litre in the ex-depot price of kerosene to Rs57 from Rs44 and that of LDO by Rs10 per litre to Rs54 from Rs44.

Petrol and HSD are two major petroleum products that generate most of the revenue for the government because of their massive and yet growing consumption in the country. HSD sale across the country stands at about 800,000 tonnes per month and that of petrol at 700,000 tonnes.

Sales of kerosene and LDO are generally less than 10,000 tonnes per month.

Published in Dawn, August 1st, 2017