ISLAMABAD: The government increased on Sunday prices of all transport fuels, except high speed diesel, by almost three per cent for a week to pass on the impact of fluctuations in the international market to consumers.

The price of petrol was raised by Rs3.04 to Rs105.49 per litre from Rs102.45. In line with a government decision to keep the CNG price at 40 per cent less than that of petrol, the CNG rate was increased by Rs2.78 to Rs96.57 per kg from Rs93.79 for Zone-I comprising Balochistan, Khyber Pakhtunkhwa and Potohar, and by Rs2.54 to Rs88.22 per kg from Rs85.68 for Zone-II comprising Sindh and Punjab.

The price of kerosene was increased by 74 paisa to Rs101.97 per litre and that of light diesel oil (LDO) by 48 paisa to Rs96.70 per litre.

High speed diesel (HSD), mostly used by heavy vehicles, electricity generators and agricultural tubewells, was the only product whose price was reduced by Rs2.70 to Rs110.46 per litre.

Over and above the landed cost of imported products and commission to retailers and oil marketing companies, the government is charging a maximum petroleum levy permissible under the finance bill at the rate of Rs10 per litre on petrol, Rs14 on HOBC (high octane blending component), Rs6 on kerosene and Rs8 on HSD. Besides, it also collects 16 per cent GST on all products.

Dispute with Parco

As a result of a policy dispute with the government, Pak-Arab Refinery Limited (Parco) is charging Rs4.41 per litre higher rate for HOBC for the second week than government believes it should under the existing rules.

An official said the price of HOBC had been increased between Rs2 and Rs2.50 per litre for various cities, but consumers would practically pay about Rs7 per litre more until the dispute was resolved.

Consumers will not get the benefit of reduction in HOBC price by between 27 paisa and Rs2.50 per litre as worked out by the Oil and Gas Regulatory Authority (Ogra) last week on the basis of abolition of freight equalisation margin. Mainly because of this reason, the Pakistan State Oil (PSO) did not announce the HOBC price on its website.

The official said that despite the government holding major share in Parco, the refinery charged Rs4.41 per litre transportation cost on HOBC instead of 60 paisa allowed by the government.

Ogra raised serious objections to the move and wrote to the ministry of petroleum and natural resources to intervene in the matter. The regulator said the transportation of crude from Karachi to Muzaffargarh was worked out at 60 paisa per litre under a policy approved by the Economic Coordination Committee of the cabinet and hence Parco’s decision to charge Rs4.41 could not be justified. Parco contended that an oil marketing company paid Rs4.41 per litre as freight cost while transporting a product from Karachi to Muzaffargarh and the same rate applied to Parco despite the fact that it produced HOBC in Muzaffargarh.

An official said that regardless of whether or not Parco’s argument was justified, the refinery could not take such a decision unless allowed by the ECC. He said that because of political engagements of Prime Minister’s Adviser on Petroleum Dr Asim Hussain and Petroleum Secretary Dr Waqar Masood Khan no decision could be taken on the issue.

As a result, HOBC prices for different cities varied between Rs136 and Rs139 per litre instead of Rs131 and Rs133 as worked out by Ogra.

Call-attention notice

The price hike, deregulation of HOBC transportation cost and weekly pricing mechanism are expected to draw severe criticism in parliament on Monday.

Since repeated resolutions of the standing committees of parliament for keeping oil prices to the level of July 31 have been ignored, the opposition PML-N has moved a call-attention notice over the increase.

Moved by five PML-N members the notice on the agenda of the National Assembly for Monday seeks to discuss “a matter of urgent public importance regarding increase in prices of petroleum products, causing grave concern amongst the public”.

Leader of Opposition in the National Assembly Chaudhry Nisar Ali Khan has opposed the weekly pricing mechanism and said prices should be revised on a monthly basis if quarterly or biannual reviews were not possible.

But Dr Asim Hussain dismissed the demand as stone-age concept. He said the government was moving towards a system under which prices of petroleum products would change on a daily basis with a click on computer for which the PSO had already purchased software.