ISLAMABAD: The government on Tuesday increased the prices of petrol and high speed diesel (HSD) by Rs2.25 and Rs2.26 per litre, respectively, for the next 15 days.
Announcing the decision on national television, Finance Minister Ishaq Dar said the government had passed on to consumers the partial increase recommended by the Oil and Gas Regulatory Authority (Ogra). The Ministry of Finance would absorb an additional burden of Rs4 billion by not fully transferring the impact of higher oil prices in the international market, he said.
He said the prices of other oil products had not been changed despite substantial increases sought by the petroleum ministry and its subordinate Ogra.
The Ministry of Petroleum and Natural Resources and Ogra had recommended an increase of Rs4.16 per litre in the price of petrol, Rs4.29 per litre in the price of HSD, Rs16.71 per litre in the price of kerosene and Rs12.53 per litre in the price of light diesel oil (LDO) from Jan 31, Mr Dar said.
But “on the directive of the prime minister we have decided to increase petrol price by Rs2.25 per litre and HSD price by Rs2.26 per litre,” he said. As such, the ex-depot price of petrol has been increased by 3.3 per cent to Rs70.29 from Rs68.04 per litre and ex-depot price of HSD has gone up by 2.93pc to Rs79.48 per litre from Rs77.22.
In line with the prime minister’s instructions to provide maximum relief to the common man and keeping in view that kerosene and LDO were used by low-income people, the prices of the two products had been maintained at the current level till Feb 15, he said. The decision has been taken also because kerosene caters to energy needs of the poor, particularly in the winter season.
The minister said it was despite the fact that the government had removed sales tax and petroleum levy on kerosene and light diesel oil and would be contributing some subsidy out of the budget to keep the prices unchanged at Rs43.25 and Rs43.35, respectively.
He said the government had mostly kept petroleum prices stable since April last year except for some increase in December and January while international prices went up by around 43pc.
Over the past few months, the government has been lowering tax rates on different petroleum products that been increased up to a record level of 50pc during last financial year to partially share the impact of higher oil prices at international market and tax rates with the consumers.
Petrol and HSD are major revenue generating oil products with HSD sales in the country now going beyond 800,000 tons per month against monthly consumption of around 700,000 tons of petrol. The sales of kerosene and LDO generally come to less than 10,000 tons per month.