ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) increased prices of petroleum products on Sunday by a massive Rs4.27 to Rs7.11 per litre or up to 9 per cent with immediate effect to offset impact of the rise in oil prices in the international market.
According to an Ogra notification, the price of petrol has been increased by Rs5.91 per litre to Rs72.96 from Rs66.99 per litre, up by 8.9 per cent and that of High Octane Blending Component (HOBC) to Rs86.67 from Rs79.56 per litre, up by Rs7.11 per litre or 8.9 per cent.
The ex-depot sale price of kerosene oil has been jacked up to Rs70.95 from Rs65.80 per litre, up by about 7.8 per cent or Rs5.15 per litre, and the price of light diesel oil (LDO) to Rs66.61 from Rs62.34 per litre, an increase of Rs4.27 per litre or 6.8 per cent.
Oil marketing companies have separately been asked to increase the price of high speed diesel (HSD) to Rs78.33 from Rs73.82 per litre, an increase of Rs4.51 per litre or 6.11 per cent. The diesel price is notified separately by oil marketing companies because the product is completely deregulated.
Announcing the price revision, Ogra spokesman Syed Jawad Naseem said the international prices of kerosene and high speed diesel had increased by 8 and 7.4 per cent and those of petrol and furnace oil by 9.1 and 6.1 per cent, respectively.
The prices of jet fuels have also been increased by 8 per cent to 10 per cent. The JP-1 price was increased by 8.3 per cent to Rs60.26 per litre and that of JP-4 by 10.14 per cent to Rs57.45 per litre. The JP-8 price was raised by 7.85 per cent to Rs63.04. This is the first price increase since July this year.
The price increase is sure to push up overall inflation rate and the cost of industrial production that has already been under pressure because of higher electricity and gas rates and huge energy shortfalls.
As a result of increase in import prices, the profit margins of dealers and oil marketing companies have increased by 111 per cent and the rate of GST being collected by the government has gone up by up to 9 per cent. This is because the dealer commission and company margin are payable at the rate of 4 per cent and five per cent, respectively, while the GST at 16 per cent results in windfall revenue to the government.
The government will now earn an additional revenue of up to Rs1.03 per litre with the highest GST while dealers and OMCs will earn a higher profit of about up to 28 paisa per litre on various products. The government will earn an additional revenue of 87 paisa on petrol, Rs1.03 on HOBC, 75 paisa per litre on kerosene and 62 paisa on light diesel oil.
The inland freight equalisation margin has also been increased by 33 per cent on petrol, 31 per cent on HOBC, 29 per cent on kerosene and 6 per cent on LDO
The ex-depot product prices announced by Ogra will include the petroleum levy of Rs10 per litre on petrol, Rs14 on HOBC, Rs6 on kerosene, Rs8 on high speed diesel and Rs3 on light diesel oil for sales through retail outlets. In case of direct sales by oil companies, the petroleum levy will be higher than sales through retail outlets. As such, the government will collect Rs12.36, Rs16.79, Rs6, Rs9.50 and Rs3 per litre on petrol, HOBC, kerosene, HSD and LDO, respectively.
Last month, the government had reduced the prices of petroleum products by less than 0.4 per cent.