Statement by Prime Minister’s Office claims tariffs increased below rates suggested by OGRA in public interest
The Pakistan Tehreek-e-Insaf-led government on Sunday notified an increase in the prices of petroleum products for the fifth consecutive fortnight, with the rate of increase ranging between 2.5 percent and 4.6 percent.
In a notification issued by the Prime Minister’s Office, the prices of high-speed diesel and petrol were increased by Rs. 2.88 and Rs. 2.70 per liter, respectively, while the prices of kerosene and light diesel oil were likewise increased by Rs. 3.54 and Rs. 3 per liter. Following the notification, the price of high-speed diesel for the next two weeks has been set at Rs. 116.07/liter against the existing Rs. 113.19, an increase of Rs. 2.88 or 2.54 percent.
The price of petrol, meanwhile, has been increased to Rs. 111.90 per liter from Rs. 109.20, a rise of Rs. 2.70, or 2.47 percent. Kerosene’s price was increased by Rs. 3.54 per liter, or 4.61 percent, from Rs. 76.65 to Rs. 80.19. The rate of light-diesel oil was increased by Rs. 3/liter, or 3.93 percent, from Rs. 76.23 to Rs. 79.23.
The government fixes oil prices on a fortnightly basis to pass on the impact of international rates to the consumer. Earlier, this process used to be conducted monthly on the basis of the import cost of state-owned Pakistan State Oil.
According to authorities, the Oil and Gas Regulatory Authority (OGRA) determines the oil prices on the basis of international prices, 17 percent general sales tax, and the maximum levy permissible under law, which is Rs. 30 per liter on HSD and petrol. Following OGRA’s suggestion, the government reviews the economic situation, and determines whether to reduce the levy to keep prices within reasonable limits. A hefty increase in fuel prices often leads to inflationary pressures.
The notification issued by the Prime Minister’s Office claims that OGRA had calculated an increase of Rs. 13.18 per liter for petrol; Rs. 12.12 for high-speed diesel; Rs. 11.10 for kerosene; and Rs. 6.62 for light-diesel oil. It said that Prime Minister Imran Khan had opted to reduce the levy and impose a lower increase in view of the public interest. Prior to being elected the prime minister, Khan would often slam the incumbent governments of imposing “petrol bombs” on the government with even minor increases to tariffs.