Ministry’s Move For Oil Price Increase Rejected

Ministry’s Move For Oil Price Increase Rejected

Prime Minister Nawaz Sharif said on Tuesday that oil prices would remain unchanged during July. 

Addressing a ceremony here he said he had rejected a summary of the petroleum ministry for an increase in the prices of petroleum products. He said the government would provide Rs2.5 billion subsidy to meet the difference in prices.

oil price
Ministry’s move for oil price increase rejected

With the aim of helping the general public during Ramazan, he said the government would not increase the petroleum prices. Based on existing tax rates, the Oil and Gas Regulatory Authority (Ogra) had worked out an increase in the prices of petrol, High-Octane Blended Component (HOBC) and kerosene and a slight reduction in diesel prices, but had advised the government on Monday to maintain price stability to avoid inflationary impact on transportation during the holy month.

Mr Sharif said as per Ogra’s recommendations forwarded by the petroleum ministry, the petrol prices were to go up by Rs4.26 per litre. According to the ministry’s summary, the price of kerosene was to be increased by 67 paisa per litre and that of HOBC by Rs7.30 per litre. The price of high speed diesel (HSD) was recommended to be reduced by 60 paisa and that of light diesel oil by eight paisa per litre. Officials of the finance ministry and Federal Board of Revenue have been directed to make adjustments in petroleum levy and general sales tax (GST) rates to partially offset the loss in petrol prices through savings from diesel prices. 

Accordingly, the government increased general sales tax on HSD by one per cent to 29pc and petroleum levy by 18 paisa to Rs7.94 per litre to create an additional cushion for reduction in petrol price. The GST on petrol was on the other hand reduced by 2pc to 17pc and petroleum levy to Rs7.54 from Rs8.30 per litre. The HSD sales across the country are over 600,000 tons a day and of petrol around 400,000 tons, while daily sales of HOBC and kerosene are less than 10,000 tons.