The prices of petroleum products are likely to go 16.9 percent up for June 2018 due to a rise in global crude prices after Oil and Gas Regulatory Authority (Ogra) has proposed a major increase in prices of all petroleum products.
According to the Ogra''s summary, consumers of HSD, which is mostly used in the transport and agriculture sectors, may face an increase of Rs 12.50 (12.7 percent) which would take its price to Rs 111.26 per liter from the existing Rs 98.76 per liter. Petrol prices may also go up from the existing Rs 87.70 to Rs 96.07per liter, an increase of Rs 8.37 per liter (9.5 percent).
The price of kerosene oil may be increased from Rs 79.87 to Rs 88.10 per liter with an increase of Rs 8.23 per liter (10.3 percent). Kerosene oil is used for cooking purpose especially in remote areas where LPG or pipeline gas is not available.
Similarly, LDO, mainly used for industrial purposes, may record an increase of Rs 11.65 (16.9 percent), meaning the price will go up from Rs 68.85 to Rs 80.50 per liter. The incumbent Pakistan Muslim League-Nawaz government will announce monthly petroleum prices for June for the last time as the tenure of the government will expire on May 31.
The Ministry of Energy (Petroleum Division) received a summary from Ogra on Wednesday that recommended an upward revision in oil prices. Prices of all petroleum products, except for kerosene, are deregulated and Ogra only monitors their prices.
The Ogra has been given the job of an accountant to calculate the prices on the basis of the formula provided by the Ministry of Energy (Petroleum Division).
The government has the capability to absorb the impact of the proposed increase in oil prices by adjusting tax rates on petroleum products.
At present, two types of taxes are being charged from consumers - petroleum levy and general sales tax. But the Finance Ministry may oppose any proposal for keeping oil prices unchanged during the latest revision, because it would affect the country''s revenues. However, any final decision will be taken by Prime Minister Shahid Khaqan Abbasi on Thursday (today).
Following the global price rise, the effect will be felt in the prices of petrol, kerosene, high speed diesel (HSD) and light diesel oil (LDO).
On Monday last, crude oil prices dropped more than $ 5 per barrel ($75.15 per barrel) after reports suggested the Opec cartel and other supply-cutting oil producers led by Russia could begin easing output caps. The indigenous crude oil meets only 15 percent of the country''s total requirements, while 85 percent requirement are met through imports in the shape of crude oil and refined petroleum products.