ISLAMABAD: The government will revise prices of petroleum products on Wednesday (today).

The prices may be increased by up to Rs10.5 per litre for the next fortnight if the calculations of the Oil & Gas Regulatory Authority (Ogra) are accepted by the government. However, a senior official told Dawn that the government might pass on a partial impact of increase in imported price and rupee depreciation to avoid inflationary pressure.

A final decision would be announced by the ministry of finance after consultations with the prime minister.

Petroleum Division sources said the working paper on the prices of petroleum products from Ogra had been received. The working paper is based on existing petroleum levy and general sales tax rates and import parity price.

According to the working paper, the regulator has calculated Re1 per litre increase in the ex-depot price of petrol and about Rs10.5 per litre hike in the ex-depot price of high speed diesel (HSD).

Likewise, the ex-depot price of light diesel and kerosene has been calculated to go up by Rs5.50 per litre each. These increases have been worked out because of slightly higher international oil prices and chiefly because of deteriorated exchange rate over the past 15 days.

Petrol and HSD are the two products that generate most of the revenue for the government because of their massive and yet growing consumption in the country. Average petrol sales are touching 750,000 tonnes per month against the monthly consumption of around 800,000 tonnes of HSD. The sales of kerosene and light diesel oil are generally less than 11,000 and 2,000 tonnes per month, respectively.

Under the revised mechanism, oil prices are revised by the government fortnightly to pass on international prices published in Platt’s Oilgram instead of previous mechanism of monthly calculations on the basis of import cost of Pakistan State Oil.

Published in Dawn, September 15th, 2021