The government on Saturday passed on the full impact of international market to consumers ranging between Rs 1.80 and Rs 9.32 per litre effective from today (Sunday). After this increase, oil prices in Pakistan have touched Rs 99.92 per litre mark due to hike in global oil prices.
A cash-starved government has allowed Oil and Gas Regulatory Authority (Ogra) to make automatic adjustment in oil prices in line with increase in global oil prices. The increase in oil prices has also resulted in escalating the rate of General Sales Tax (GST) on petroleum products from 1.8 percent to 11.8 percent, enabling government to collect more revenue on account of GST collection.
The prices of petroleum products have been increased as: petrol by Rs 4.85 per litre,; High Speed Diesel (HSD) Rs 4.42 per litre; kerosene oil Rs 5.60 per litre; Light Diesel Oil (LDO) Rs 9.32 per litre; and HOBC Rs 1.80 per litre.
The new prices of petroleum products will stand at: petrol Rs 88.41 per litre; HOBC Rs 99.92 per litre; HSD Rs 97.31 per litre; LDO Rs 88.30 per litre; and kerosene oil Rs 89.70 per litre. The increase in petrol price is 5.8 percent, HSD 4.8 percent, kerosene oil 6.7 percent, LDO 11.8 percent and HOBC 1.8 percent. The average price of crude oil has been 6.67 percent higher on May 1, compared to the prevailing price on April 1, 2011. In the Arabian Gulf market, average crude oil price peaked to $117.40 dollars per barrel against $110.06 per barrel on April 1, 2011.
After increase in oil prices, the hike in rates of General Sales Tax (GST) on petroleum products are: 5.8 percent increase in petrol, HOBC 1.8 percent, HSD 4.7 percent, LDO 11.8 percent and kerosene oil 6.6 percent. The government will continue to charge Rs 3.16 per litre Petroleum Levy (PL) on petrol, HSD Rs 0.44 per litre and HOBC Rs 6.13 per litre. However, the rate of PL on LDO and kerosene oil is zero.
The government has generated Rs 52 billion as PL on petroleum products against budgetary estimates of Rs 110 billion. The government has provided Rs 30 billion subsidy so far and will still be required to extend another Rs 8 billion in the coming month despite increase in oil prices. The government collected Rs 107 billion revenue on account of PL and GST on petroleum products during first half (July-December) of financial year 2010-11. The annual budgetary target for collection is Rs 250 billion, which includes PL and general sales tax in the domestic market and at import stage.