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Petrol, diesel prices may go up in October

Petrol, diesel prices may go up in October

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Friday recommended Rs2.17 and Rs2.35 per litre increase in the price of high-speed diesel (HSD) and petrol, respectively, effective from Oct 1.

It also recommended Rs19.32 and Rs14.09 per litre rise in kerosene and light diesel oil (LDO) rates, respectively.

As such, if the regulators’ calculations are accepted, the price of kerosene would go up by 44 per cent, followed by 32pc of LDO. The price of petrol would increase by 3.3pc and that of HSD by 2.8pc.

The government is, however, expected to pass on partial increase recommended by the regulator, an official said.

In a summary sent to the government, Ogra said the adjustment in diesel and petrol prices was required to pass on the impact of increase in the international market during September.

An official said the regulator on the basis of existing tax rates and imports made by Pakistan State Oil (PSO) in September, revised upwards the new ex-depot price of HSD to Rs79.40 for October from Rs77.40 per litre. Likewise, it worked out the ex-depot price of petrol at Rs73.85 Rs71.50 per litre.

It proposed Rs19.32 (almost 44pc) increase in kerosene price to Rs63.32 per litre from Rs44. For LDO, it recommended a Rs14.09 (32pc) per litre hike to Rs58.09 per litre from Rs44.

For the past many months, the Ministry of Petroleum and Ogra have been recommending a substantial increase in the prices of kerosene and LDO to minimise the huge price differential with petrol.

The ministry believed that a Rs30 per litre price differential between petrol and the two other products was encouraging dishonest market operators to mix kerosene with petrol for higher profits. This is resulting in adulterated and poor quality petrol in the market instead of higher grade (92RON) being charged to consumers.

The government has been rejecting these calls in the past, saying it wanted to protect poor people.

Interestingly, Prime Minister Shahid Khaqan Abbasi has maintained the status quo despite personally being an advocate of using prices as a tool to end adulteration in the past.

Kerosene is the only regulated petroleum product. However, it is unavailable at fixed rates anywhere in the country while all other products are deregulated and are available reasonably within the price band announced by the government.

Petrol and HSD are two major products that generate most of the revenue for the government because of their ever-growing consumption.

The current GST rate for HSD and petrol stands at 30pc and 17pc, respectively.

Published in Dawn, September 30th, 2017

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