ISLAMABAD: Effective from Sunday (today), petroleum prices have been increased by up to Rs4 per litre.

Petrol and high-speed diesel — the two most widely used products — will now sell for Rs73.50 and Rs79.40 a litre, respectively, after an increase of Rs2 each.

International oil prices inched up by $1 to reach around $51 a barrel last month. A similar pattern was witnessed in the prices of petroleum products in the last week of September.

The main reason for the increase in crude oil prices was a rise in demand from developed countries ahead of the winter. Moreover, the global oil supply shrank in September, largely due to civil unrest in Libya and disruptions to US production and storages in the wake of recent hurricanes.

According to a statement issued by the finance ministry on Saturday, Prime Minister Shahid Khaqan Abbasi has decided to raise the prices of diesel, petrol and light diesel oil (LDO) by Rs2 per litre each and that of kerosene by Rs4 per litre. The new prices will remain effective from Oct 1 to Oct 31.

The new price of LDO — used as a fuel to operate the engines of some old mills and pumps mainly in rural areas — is Rs46 per litre. A litre of kerosene now costs Rs48.

The government is collecting heavy taxes on the sale of petroleum products every month, including Rs25 billion as general sales tax (GST) and Rs10bn in petroleum levy from consumers. Petrol and diesel, not only used in vehicles but also in generators, are the two biggest contributors.

Earlier, in a summary sent to the newly formed Ministry of Energy, the Oil and Gas Regulatory Authority recommended an increase of Rs2.35 per litre for petrol, Rs2.17 for diesel, Rs19.32 for kerosene and Rs14.09 for LDO for October.

The government had made no changes in the prices of kerosene and LDO for several months because there was zero GST and petroleum levy on the two products.

However, there is a severe shortage of kerosene in the country. Before the recent change in its price, it was selling for Rs90 to Rs100 per litre on the black market against the official price of Rs44.

Published in Dawn, October 1st, 2017