ISLAMABAD: Despite calculations of the Oil and Gas Regulatory Authority (Ogra) for an increase in petroleum prices for October, the rates will remain unchanged next month on a directive of Prime Minister Imran Khan.

Ogra had recommended an increase of up to Rs4.41 per litre in the prices of petroleum products for October.

Talking to a group of journalists on Saturday, Finance Minister Asad Umar said the prime minister directed him not to raise the oil prices, as it would burden the masses.

After this decision, the price of petrol will remain at the current level of Rs92.83 per litre and high-speed diesel (HSD) at Rs106.57 per litre.

Ogra recommended up to Rs4.41 per litre increase

Sources in the finance ministry said Mr Umar earlier met the PM at his Banigala residence and apprised him about Ogra recommendations and details of mini-budget.

Based on the international market trends, Ogra had calculated an increase of Rs4.10 per litre in the price of petrol and Rs4.41 per litre for HSD — the most widely consumed petroleum fuel in the country — as it is used in goods as well as public transport.

However, in order to absorb the effect of increased petroleum prices in the international market, the government will correspondingly reduce the applicable sales tax rate on HSD from the current 22 per cent to 17.5pc, from 9.5pc to 4.5pc on motor spirit (petrol) and from 6pc to 1.5pc on kerosene oil. Sales tax on light diesel oil will be zero.

While the increase for kerosene oil and light diesel was calculated at Rs3.66 and Rs3.39 per litre, respectively, the price of kerosene oil will be Rs83.50 per litre and light diesel will be available at Rs75.96 per litre.

Kerosene oil is used in remote areas where liquefied petroleum gas (LPG) is not available for cooking purpose. Light diesel oil is used in the industrial sector and some tube wells, where electricity connections are not available or the area faces prolonged power outages.

Published in Dawn, September 30th, 2018