ISLAMABAD: The government on Sunday increased prices of petrol and diesel by Rs1.77 and Rs2 per litre respectively with immediate effect for the next 16 days, passing a partial impact of a hike in international oil prices on to consumers.
Announcing the decision, Finance Minister Ishaq Dar said the prices of other products were kept unchanged despite substantial increases demanded by the petroleum ministry as well as the Oil and Gas Regulatory Authority (Ogra).
“Ministry of Petroleum & Natural Resources and Ogra have recommended an increase of Rs1.77 per litre in the price of MS-92 RON petrol, Rs3.94 in the price of high-speed diesel, Rs14.31 in the price of kerosene and Rs10.11 in the price of light diesel oil with effect from January 16,” Mr Dar said.
In line with the prime minister’s instructions to provide as much relief as possible to the common man, and keeping in view that kerosene and light diesel are used by low-income segments of the country’s population, prices of the two products have been maintained at the current level until Jan 31.
Dar claims prices of other products kept unchanged despite demand by petroleum ministry, Ogra
The decision had been taken also keeping in view the fact that kerosene catered to the energy needs of the poor, especially in winter, the minister said.
He said it had been decided that the price of petrol would be increased by Rs1.77 per litre in line with Ogra’s recommendation and that of high-speed diesel by Rs2, which was almost half the increase recommended by the regulator.
As such, the ex-depot price of petrol went up by 2.67 per cent to Rs68.04 per litre from Rs66.27 and that of high-speed diesel by 2.65pc to Rs77.24 per litre from Rs75.24.
Over the past few months, the government has been bringing down tax rates on different petroleum products that had been increased up to a record level of 50pc during the last financial year in a bid to partially share the impact of higher international oil prices and tax rates with consumers.
Following this strategy, the finance minister had increased the prices of petrol and high-speed diesel by Rs2 and Rs2.7 per litre, respectively, for the month of December 2016. However, on the directive of prime minister, the prices of kerosene and light diesel were kept unchanged in December.
Even with reduced rates, the government will charge about Rs10 per litre on petrol and Rs17 on high-speed diesel as general sales tax. Both are the largest revenue-generating oil products, with diesel sale across the country now going beyond 800,000 tonnes per month, against a monthly consumption of around 700,000 tonnes of petrol. The sales of kerosene and light diesel are generally less than 10,000 tonnes per month.
The finance minister claimed that the prices had been maintained since April last year to ensure price stability, despite an increase of around 43pc in international oil prices during 2016. He said the government had been absorbing the negative financial impact after its decision to not pass on the increase to consumers.
PPP REACTION: The Pakistan Peoples Party immediately rejected the increase in oil prices, saying it would protest the decision in parliament.
In a statement issued by the party’s media office, Senator Saeed Ghani said the decision would cause a price hike and asked the government to withdraw it.