Petroleum products likely to increase by 11.8%

ISLAMABAD: The Oil and Gas Regulatory Authority worked out on Monday up to 11.8 percent increase in the prices of major petroleum products for June on the basis of existing tax rates.

In a summary sent to the government, the authority reported an increase in the international oil prices this month which required to be passed on to consumers unless the government cut tax rates.

The crude prices in the Middle East, the source of Pakistan’s oil imports, went up by about $4-5 per barrel to about $49 in the latter part of May from about $44 a month ago.

In its working paper, Ogra recommended an increase of 1.3pc in the price of petrol, 3pc in high octane blending component (HOBC), 9.2pc in high speed diesel (HSD) and kerosene and 11.8pc in light diesel oil (LDO).

An official said the prices could be brought down by up to 40-45pc if the general sales tax rate was revived to normal 17pc, but the government would continue to offset losses in revenue collection through highest-ever tax rates on petroleum products.

Ogra forwarded its working paper to the government on the basis of existing tax rates under instructions from Finance Minister Ishaq Dar.

A decision about adjustment in oil prices would be announced on Tuesday.

Based on existing tax rates and PSO purchases from the international market, Ogra worked out the ex-depot price of petrol (motor gasoline) at Rs65.12 per litre from the existing Rs62.27.

The regulator estimated the price of HSD to go up to Rs79.21 per litre from Rs72.52.

It worked out the price of light diesel oil at Rs42.44 per litre from Rs37.97.

Likewise, Ogra calculated the price of high octane blending component at Rs74.86 per litre from Rs72.68.

It recommended ex-depot price of kerosene to increase to Rs47.22 per litre from Rs43.25.

Ogra worked out the price of JP-1 at Rs44.53 per litre. The JP-4 price was estimated to go up to Rs38.84 and that of JP-8 to Rs42.07.

Currently, the government is collecting about Rs25 per litre taxes on petrol in the form a fixed sales tax of Rs14.58 and Rs10 as petroleum development levy. It is collecting about Rs38 per litre tax on HSD, including fixed sales tax at Rs29.57.

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