Govt climbs petroleum cost by Rs5 per liter

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ISLAMABAD: Ignoring the Oil & Gas Regulatory Authority’s (Ogra) workings, the govt on Wednesday increased the costs of all the petroleum products by Rs5 to Rs6 per litre with immediate effect for the next 15 days to expire impact of the upper international market and currency depreciation.

According to a notification issued by the Ministry of Finance, the costs of petrol and high-speed diesel (HSD) were enhanced by Rs5 and Rs5.01 per litre which of kerosene and lightweight diesel fuel (LDO) by Rs5.46 and Rs5.92 per litre, respectively.

As such, the ex-depot price of petrol was raised to Rs123.30 per litre from the prevailing Rs118.30 per litre, up by 4.23pc. Petrol is usually utilized in private transport, small vehicles, rickshaws and two-wheelers.

The ex-depot price of HSD was set at Rs120.04 per litre against the prevailing Rs115.03, a rise of 4.36pc. HSD price is taken into account highly inflationary because it is usually utilized in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube-wells and threshers.

Likewise, the ex-depot price of kerosene was set at Rs92.26 per litre as against Rs86.80 at the present, up by 6.3pc. Kerosene is usually employed by unscrupulous elements for mixing it with petrol and to some extent for lighting in very remote areas.

The ex-depot price of LDO was also increased to Rs90.69 per litre from Rs84.77 per litre, up by 6.98pc. LDO is consumed by flour mills and a few power plants.

In its working paper, Ogra had recommended an Rs10.5 per litre increase in HSD and Re1 per litre in petrol, Rs5.46 per litre in kerosene and Rs5.92 per litre in LDO. the govt, however, shifted the partial burden from HSD price by increasing the speed of petroleum levy on petrol to contain inflationary pressure without further impacting its revenue position. It accepted the Ogra’s performing on LDO and kerosene. Petrol and HSD are two major products that generate most of the revenue for the govt due to their massive and yet growing consumption within the country. Average petrol sales are touching 750,000 tonnes per month against the monthly consumption of around 800,000 tonnes of HSD. The sales of kerosene oil and LDO are generally but 11,000 and 2000 tonnes per month.

Under the revised mechanism, oil prices are revised by the govt on a fortnightly basis to expire international prices published in Platt’s Oilgram rather than the previous mechanism of monthly calculations on the idea important cost of Pakistan State Oil.

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