ISLAMABAD: Ignoring the Oil & Gas Regulatory Authority’s (Ogra) workings, the government on Wednesday increased the prices of all the petroleum products by Rs5 to Rs6 per litre with immediate effect for next 15 days to pass on impact of higher international market and currency depreciation.

According to a notification issued by Ministry of Finance, the prices of petrol and high-speed diesel (HSD) were enhanced by Rs5 and Rs5.01 per litre and that of kerosene and light diesel oil (LDO) by Rs5.46 and Rs5.92 per litre, respectively.

As such, ex-depot price of petrol was raised to Rs123.30 per litre from the existing Rs118.30 per litre, up by 4.23pc. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers.

The ex-depot price of HSD was set at Rs120.04 per litre against the existing Rs115.03, an increase of 4.36pc. HSD price is considered highly inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube-wells and threshers.

Likewise, the ex-depot price of kerosene was set at Rs92.26 per litre as against Rs86.80 at present, up by 6.3pc. Kerosene is mostly used by unscrupulous elements for mixing it with petrol and to some extent for lighting in very remote areas.

The ex-depot price of LDO was also increased to Rs90.69 per litre from Rs84.77 per litre, up by 6.98pc. LDO is consumed by flour mills and a couple of power plants.

In its working paper, Ogra had recommended Rs10.5 per litre increase in HSD and Re1 per litre in petrol, Rs5.46 per litre in kerosene and Rs5.92 per litre in LDO. The government, however, shifted partial burden from HSD price by increasing the rate of petroleum levy on petrol to contain inflationary pressure without further impacting its revenue position. It accepted the Ogra’s working on LDO and kerosene.The petrol and HSD are two major products that generate most of revenue for the government because of their massive and yet growing consumption in the country. Average petrol sales are touching 750,000 tonnes per month against the monthly consumption of around 800,000 tonnes of HSD. The sales of kerosene oil and LDO are generally less than 11,000 and 2000 tonnes per month.

Under the revised mechanism, oil prices are revised by the government on a fortnightly basis to pass on international prices published in Platt’s Oilgram instead of previous mechanism of monthly calculations on the basis of import cost of Pakistan State Oil.

Published in Dawn, September 16th, 2021