ISLAMABAD: After two fortnightly cuts, the prices of petrol and diesel may go up again by about Rs6 per litre each because of higher international oil prices.

Informed sources said the Oil and Gas Regulatory Authority had worked out about Rs6 per litre increase in the prices of both major projects based on the existing tax rates and import prices over the past 15 days.

At present, the ex-depot price of high speed diesel (HSD) is Rs110.76 per litre and that of petrol is Rs108.56. Petroleum levy on petrol stands at Rs11.23 per litre and that on HSD at Rs15.29.

The government had already collected almost 30 per cent higher than targeted revenue on petroleum products through petroleum levy in the first six months of the current fiscal year. Therefore, it was comfortable with minor adjustments in petroleum levy. Accord­ing to the finance ministry, the collection on account of petroleum levy amounted to Rs275 billion in the first six months against the annual target of Rs450bn.

Over the last two years, the government has been tweaking with petroleum levy rates instead of GST as the former remains in the federal kitty while the latter goes to the divisible pool of taxes and thus about 57pc share is grabbed by the provinces.

Petrol and HSD are two major products that generate most of the revenue for the government because of their massive and yet growing consumption in the country. Average petrol sales are touching 700,000 tonnes per month against HSD’s monthly consumption of around 600,000 tonnes. Sales of kerosene and light diesel oil are generally less than 11,000 and 2,000 tonnes per month, respectively.

Under a new mechanism, oil prices are revised by the government on a fortnightly basis.

Published in Dawn, April 30th, 2021