Prices of all petroleum products were increased on Sunday by about Rs3.50 per litre for the month of June.
The price hike was approved by the prime minister and announced by Finance Minister Ishaq Dar who said the government had borne the brunt of Rs6 billion revenue losses by passing on to consumers only half of the increase recommended by Ogra.
In doing so, the government reduced petroleum levy on almost all products, general sales tax on high speed diesel from 32 to 28 per cent and increased GST on petrol from 17 to 19pc. As such, the ex-depot price of petrol increased by Rs3.50 to Rs77.79 from Rs74.29 per litre. The levy on petrol was reduced from Rs10 to Rs8.30 per litre, but the GST was increased by two per cent. The product is mostly consumed by private vehicles and residential electricity generators. The price of high speed diesel (HSD) was raised by Rs3.51 to Rs87.12 from Rs83.41 per litre. Petroleum levy on HSD was slightly brought down to Rs7.76 from Rs8 per litre and the GST by four per cent. Tubewells, public transport and freight forwarding vehicles depend on HSD. The price of kerosene was increased by Rs3.50 to Rs64.94 from Rs61.44 per litre. The GST on kerosene was kept unchanged and petroleum levy reduced from Rs6 to Rs3.41 per litre.
The product is used for cooking and heating in far-flung areas. The price of high octane blending component (HOBC) was fixed at Rs83.81 per litre, an increase of Rs3.50. The GST on HOBC was kept unchanged while petroleum levy was reduced to Rs5.66 from Rs14 per litre. The product is mostly used in high-end personal cars like Mercedes and Porsche. The government increased the price of light diesel oil (LDO) by Rs3.57 to Rs65.56 per litre by reducing the GST from 17 to 16pc and petroleum levy to zero from Rs3. The product is mostly used in tubewells and some power plants and other engines. In its summary, the Oil and Gas Regulatory Authority had recommended to the government to reduce taxes on petroleum products to absorb the impact of higher international prices ahead of Ramazan. Based on the existing tax rates, Ogra had worked out an increase of Rs6.19 per litre in the price of petrol, Rs7.91 for HSD, Rs6.53 for kerosene oil, Rs13.25 for HOBC and Rs7.62 for LDO.