ISLAMABAD: Prices of major petroleum products may go up by Rs5-6 per litre with effect from Oct 1 because of rapid devaluation of the rupee and higher oil prices in the Middle East.

A senior official of the Oil and Gas Regulatory Authority (Ogra) told Dawn that crude prices in Middle East had gone up from $108 to $112 per barrel because of the US-Syria standoff in the first three weeks of the current month. The declining value of the rupee, he added, had significantly contributed to higher import prices.

“We faced double jeopardy this month in the shape of 3.7 per cent increase in international crude price and sliding rupee value, negatively impacting import parity prices by more than 7 per cent,” the official said. As a result, the prices of all petroleum products would now move up to three digits.

He said international prices were showing a little respite in the last week of September amid diplomatic efforts towards resolution of the Syria crisis that might have a positive impact on Pakistani market next month. But ships for current month had either already delivered petroleum products or had already been booked. He said the ex-depot price of petrol and high octane blending component could rise by Rs5 and Rs6 per litre, respectively. The price of petrol is likely to go up to Rs114.14 per litre for ex-depot sales from Rs109.14.

The ex-depot price of kerosene oil will go up to 109.24 from Rs105.99 per litre and that of high speed diesel (HSD) to Rs115.38 from Rs112.26 per litre.

The price of light diesel oil (LDO) will be increased by about Rs2.89 per litre to Rs101.32 from Rs98.43 and that of high octane blending component (HOBC) to Rs6 per litre to Rs144.33 per litre.

The retail price of petroleum products are usually 30-40 paisa per litre higher than ex-depot prices fixed by the government, because of transportation cost from depots to retail outlets.

The official said Ogra was recommending to the government to absorb a part of the proposed increase in the petroleum levy instead of passing on full impact to consumers already facing inflationary pressures.

He said the government was currently mopping up about Rs7.5 billion per month on account of the levy on petroleum products while another Rs21.5 billion a month came from general sales tax.

In Ogra’s opinion, the government could maintain its overall monthly revenue of Rs29 billion if it partially absorbed the proposed increase given the fact that higher product prices yield higher GST collection.

Besides the import parity price of petroleum products, profit margins to dealers and oil companies, the government is currently charging petroleum levy at Rs14 per litre on HOBC, Rs10 on petrol, Rs4.40 on HSD and Rs6 on kerosene oil. On top of that the government is also charging 17 per cent GST on sale price of petroleum products.