The Oil and Gas Regulatory Authority (OGRA) has recommended on Monday to increase prices of High Speed Diesel (HSD) and petrol by PKR 5.19 and PKR 2.49 respectively for November. The regulatory authority also recommended increase of PKR 15.99 per liter in the price of kerosene and PKR 12.63 increase in the price of Light Diesel Oil (LDO).
Subsequently, if the government accepts these recommendations, then the prices of kerosene and LDO would increase by 33.3% and 27.5% respectively. The price of petrol will increase by 3.4% and HSD price will go up by 6.5%. According to an official, the government will likely pass partial burden on the consumers and will continue to provide subsidy.
Interestingly, a summary sent to the government by OGRA said that the adjustment is suggested because of the increase in prices of petroleum products in the international market in October.
OGRA recommended new ex-depot price of kerosene at PKR 63.99 per liter from existing PKR 48, showing an increase of PKR 15.99 or 33.3%. It proposed PKR 12.63 increase in the LDO price to PKR 58.63 from PKR 44.
It is important to note that the ministry of petroleum and OGRA have been recommending to increase the price of kerosene and LDO over the past two years in order to reduce the price gap with petrol. According to the ministry, PKR 30 per liter price difference was encouraging dishonest operators to mix kerosene with petrol to earn more profit.
On the other hand, the government is continuously rejecting these calls, saying that it wanted to protect poor people. Adding to that, Prime Minister Shahid Khaqan Abbasi has maintained the status quo, except for PKR 4 per liter increase early this month in the price of kerosene.