ISLAMABAD: Amid slight reduction in international crude price, the government is likely to approve a substantial increase in the prices of all petroleum products for next month.

A senior government official told Dawn that the Oil and Gas Regulatory Authority (Ogra) on Tuesday moved a summary to the government containing calculations on petroleum prices on the basis of higher general sales tax and petroleum levy.

Ogra has recommended an increase of about Rs5.15 per litre for petrol (motor spirit) and Rs5.65 for High Speed Diesel (HSD), Rs5.38 for kerosene and Rs8.9 for Light Diesel Oil (LDO).

The official said the crude price had dropped by more than 12pc in the Arabian Gulf to $63 per barrel on July 30 from $72 on April 28, but the government had been gradually increasing tax rates.

Based on the import parity price of the Pakistan State Oil (PSO) for purchases in July, Ogra has worked out the ex-depot rate of HSD at Rs132.47 per litre, instead of Rs126.82, with an increase of about 4.45pc.

Likewise, the regulator has calculated ex-depot price of petrol to go up by about 4.6pc to Rs117.83 per litre from Rs112.68.

Similarly, the ex-depot price of LDO has been proposed to increase by more than 10pc to Rs97.52 per litre from Rs88.62. The kerosene price has been worked out at Rs103.84 per litre, showing an increase of about 5.5pc over the current rate of Rs98.46.

The government is currently charging 17pc general sales tax (GST) on all petroleum products. Besides the GST, the petroleum levy ranging between Rs14-18 per litre is being charged on petrol and HSD and Rs3-6 on kerosene and LDO.

Petrol and HSD are two major products that generate most of revenue because of their massive and yet growing consumption in the country. Total HSD sales are touching 800,000 tonnes against monthly consumption of around 700,000 tonnes of petrol. The sales of kerosene and LDO are generally less than 10,000 tonnes per month.

Published in Dawn, July 31st, 2019