ISLAMABAD: The government on Friday increased the prices of key petroleum products by Rs4 per litre for the next fortnight, with petrol reaching Rs144.82 and diesel Rs141.62 per litre.

The price of kerosene was increased by Rs3.95 to Rs113.53 per litre and that of light diesel oil by Rs4.15 to Rs111.06.

Announcing the new rates effective till January 15, the finance ministry lauded the prime minister for rejecting the summary for higher increase calculated by the Oil and Gas Regulatory Authority (Ogra). The ministry also said the higher increase was in terms of enhanced petroleum levy to meet the target agreed with the International Monetary Fund.

On the other hand, industry players said there was a slight increase in international oil prices as the world markets were opening up and also due to the heating demands in many cold areas. While Arab light crude witnessed an increase of four per cent to $79.3 per barrel in the outgoing fortnight, a similar trend was seen for the two most highly consumed petroleum products in the country.

Petrol price increased by $2.60 to $83.89 per barrel in the Gulf markets and that of high speed diesel (HSD) by $3.21 to $84.07 per barrel.

Meanwhile, the Oil Companies Advisory Council (OCAC) has calculated that the demand for HSD during January 2022 will remain constant at around 600,000 tonnes, but that of petrol will decrease to 650,000 tonnes from 700,000 tonnes in December 2021. Experts in the field said the national demand for diesel was almost constant at around 20,000 tonnes per day, with up to 90pc coming from the transport sector.

Despite the holiday season and massive movement of local tourists towards upcountry, the industry estimates a decline in petrol consumption for January.

Jet fuel rates have also been increased and there is a rise in its consumption, which will further go up during January. It’s demand at Karachi airport has been estimated to increase by 20pc to around 600 tonnes daily.

Meanwhile, Ogra has reduced the base price of liquefied petroleum gas (LPG) by Rs5,033 to Rs128,433 per tonne. The final consumer price after the addition of all taxes, duties and profit margins of distributors it will be Rs196.68 per kilogram for January.

The industry players have slammed the government for what they termed ill-planned policies related to LPG. “LPG is the costliest product in the fossil fuel sector, and it is consumed mainly by the rural people who do not have access to piped gas, but still the government is charging more than Rs33,246 for per tonne,” said Ali Haider, senior vice chairman of the LPG Distributors Association of Pakistan.

Published in Dawn, January 1st, 2022