ISLAMABAD: The federal government on Satur­day increased the prices of petroleum products by Rs3 per litre for this fortnight, with the result the new prices of high-speed diesel (HSD) and petrol are now Rs144.62 and Rs147.83, respectively.

The increase in prices allowed for the period from January 16 to 31 is less than what had been proposed by the Oil and Gas Regulatory Authority (Ogra), however.

Petrol and diesel (HSD) are the two most widely consumed petroleum fuels in the country, and the estimates of Oil Companies Advisory Council (OCAC) show that the petrol consumption will be higher than that of diesel in the month of January.

“The Murree incident will slow down internal tourism, but the suspension of CNG sale will give rise to increase in petrol sales,” said an oil marketing company representative. Not only in Punjab, CNG stations have been closed in Sindh and Balochistan too due to increase in gas demand from domestic consumers.

While the prices of low off-take fuels have also been raised, the new kerosene oil rate has jumped from Rs113.48 to Rs116.48 per litre. Kerosene oil is used in remote areas for cooking purposes where LPG is unavailable. Also, a major user of this fuel is army in remote areas such as northern parts of Pakistan.

The price of Light Diesel Oil (LDO) has gone up by Rs3.33 to Rs114.54 per litre.

According to a finance division statement, the petroleum products are showing fourth straight weekly gain and witnessed an increase of 6.2 per cent just in last week in the international market. “Against the recommendation of Ogra for increase of Rs5.52 per litre in petrol and Rs6.19 per litre in the HSD prices, the Prime Minister has directed to absorb the international prices through further cut in sales tax from last fortnight,” the finance ministry stated.

The ministry will take Rs2.6bn revenue hit due to reduced sales tax. The statement added that the government decided to make ‘partial’ increase in the prices of the petroleum products in order to provide relief to the end consumers. “The existing sales tax rate and petroleum levy on various petroleum products are much below the budgeted targets,” the finance ministry explained.

A senior petroleum division official said due to unrest in the oil-producing Kazakhstan and tension between Russia and Ukraine, the international markets witnessed panic in recent weeks. During the outgoing fortnight up to January 15, the crude oil prices enhanced by around $6 to $85 per barrel in the Gulf markets and a similar trend was witnessed in the prices of petroleum products.

Published in Dawn, January 16th, 2022