The government on Monday rejected Oil and Gas Regulatory Authority's (Ogra) proposal to increase petroleum products prices for the month of July and decided to maintain the rates by providing a subsidy of Rs 510 million. Prime Minister Nawaz Sharif had directed Finance Minister Ishaq Dar to provide relief to the masses during holy month of Ramazan, hence the Ministry of Finance has decided to maintain petroleum products prices at the existing level.
According to OGRA working paper submitted to the government, the regulatory body proposed an increase of Rs 0.84 per litre in the price of petrol, Rs 3.63 per litre in the price of High Octane Blending Component (HOBC), Rs 0.30 per litre in kerosene oil, Rs 0.27 per litre in high speed diesel and Rs 0.22 per litre in light diesel. It may be mentioned here that the government also provided a subsidy of Rs 1.78 billion to keep petroleum products prices unchanged for the month of June, however, kerosene oil price was reduced from Rs 98.07 to Rs 97.40 per litre with a decrease of Rs 0.67 rupees per litre.
After the government's decision not to change petroleum product prices against Ogra's calculation, different petroleum products will be sold on following rates: Petrol at Rs 107.97 per litre, high speed diesel at Rs 109.34 per litre, light diesel oil at Rs 94.13 per litre, HOBC at Rs 134.63 per litre and kerosene oil at Rs 97.40 per litre.
During the ongoing financial year, the government so far has provided a subsidy of Rs 20 billion on petroleum products by absorbing Petroleum Levy (PL). On account of the PL, the government was collecting Rs 10 per litre on petrol, which on June 1, 2014 has been reduced to Rs 8.79 per litre, Rs 14 on HOBC which now has come down to Rs 11.41 per litre, Rs 6 on kerosene and Rs 8 on HSD per litre, which now reached Rs 6.29 per litre.
Moreover, the government is also collecting General Sales Tax (GST) at 17 percent on the sale of petrol and petroleum products, which is one of the top revenue sources for the federal government.
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