Officials of the Ministry of Petroleum and Natural Resource announced that the price of Petroleum products could experience a hike up to PKR 6.93/ liter from January 1st due to increase in crude oil prices globally.
The Ministry of Petroleum received a summary from the Oil and Gas Regulatory Authority (OGRA) that recommended an increase in prices of petroleum products. It is worth noting that all petroleum products, except Kerosene, are deregulated and only OGRA monitors them.
As part of its monthly price adjustment, OGRA advised government to increase the prices as follows:
- The price of petrol is expected to increase by 47% or PKR 0.31/liter
- The price of High Speed Diesel (HSD) may increase by 5.24% or PKR 3.94/liter
- The price of Light Diesel Oil (LDO) may increase by 8.02% or PKR 3.48
The price of Kerosene oil, which is usually used for cooking purposes in remote areas where liquefied petroleum gas is not available, might experience an increase from PKR 43.25 to Rs50.18 per liter after an increase of Rs6.93 per liter. The price of LDO, which is commonly used for industrial purposes, may also increase from PKR 43.34 to PKR 46.82/ liter.
Many reports indicate that the Government can reduce the price impact by adjusting the tax rates charge from consumers on petroleum products. There are two type of taxes that are being charged from the oil consumers- General Sales Tax (GST) and Petroleum Levy. Speculations are also swirling around that the finance ministry might oppose this proposal and maintain current prices as higher will affect the country’s revenue.