ISLAMABAD: Officials in the Ministry of Petroleum and Natural Resources have revealed that prices of petroleum product in the country can increase by up to 19.9 per cent in July due to a rise in global crude oil prices.
The ministry received a summary from the Oil and Gas Regulatory Authority (OGRA) on Wednesday that recommended an upward revision in oil prices as international crude rates increased.
OGRA only monitors the prices and prices of all petroleum products, except for kerosene oil, are deregulated. The government has the capability to absorb the impact of proposed increase in oil prices by adjusting tax rates on petroleum products.
Despite a decline of over 50 per cent in global prices, the consumers had largely been denied full relief in previous months due to hefty taxes to avoid revenue loss to the government. At present, two types of taxes are being charged from the oil consumers, including petroleum levy and general sales tax.
The Ministry of Finance may oppose any proposal for keeping oil prices unchanged in the latest revision as it would affect the country’s revenues. But the final decision will be taken by Prime Minister Nawaz Sharif. Following the rise in global oil prices, the effect would be felt in prices of petrol, high-speed diesel, light diesel oil, kerosene oil and high octane blending component.
According to OGRA’s summary, the petroleum ministry officials had said the consumers of HSD, which is mostly used in the transport and agriculture sectors, may face a hike of Rs 3.75 (5.2 per cent) which would take the price to Rs 76.27 per litre from the existing Rs 72.52.
The price of petrol may go up from the existing Rs 64.27 to Rs 66.20 per litre which shows an increase of Rs1.93 (3 per cent). The price of kerosene oil, used for cooking purposes in remote areas where liquefied petroleum gas is not readily available, may be increased from Rs 43.25 to Rs 51.87 per litre with an increase of Rs 8.62 (19.9 per cent).
Similarly, LDO which is mainly used for industrial purposes, may record an increase of Rs 5.38 (14.2 per cent), meaning the price will go up from Rs 37.97 to Rs 43.37 per litre. The price of HOBC, mainly used in luxury cars, may rise by Rs 3.53 (4.9 per cent) taking the rate to Rs 76.21 from Rs 72.68 per litre.