ISLAMABAD, April 17: The government on Thursday announced an increase of Rs3 per litre in the prices of petrol and diesel.

The first increase in petroleum prices by the new government came after a delay of one day because Finance Minister Ishaq Dar was out of the country. The government claims that the Oil and Gas Regulatory Authority (Ogra) regulates the oil price independently.

Prices of petrol, HOBC and light diesel oil were raised by Rs3 per litre for a 15-day period ending on April 30. However, the price of kerosene remained unchanged.

This was the third increase in oil prices during the past one-and-a-half months.

The prices of crude oil in the international market jumped to $115.15 per barrel on Thursday.

Sources said the domestic prices might be increased further to reduce subsidy and pressure on the balance of payments.

They said the earlier increase in oil prices had pushed inflation to an all-time high of over 14 per cent in March, with food inflation hovering around 20 per cent.

The government has already revised upward its annual inflationary target, envisaging a hike in the consumer price index up to 10 per cent from the earlier target of 6.5 per cent for the current fiscal year.

The annual food inflation has been projected at 14 per cent.

The price of petrol will increase to Rs65.81 per litre from Rs62.81, diesel to Rs41.59 from Rs38.59 and HOBC to Rs77.77 from Rs74.77. The price of kerosene will remain at Rs38.73 per litre.

Finance Secretary Dr Waqar Masood told Dawn that the price of kerosene had not been increased on the directive of the prime minister to avoid further burden on the poor. He said the government gave Rs20 per litre subsidy on kerosene.

The government gave a subsidy of Rs19 per litre on diesel.

The increase in prices will push the country’s import bill to around $36 billion, the highest ever, by the end of June. The import bill for oil is also expected to increase to $15 billion from $11 billion.

The trade deficit has ballooned to $14 billion in the first nine months of the current fiscal year. It is anticipated to increase to $20 billion by the end of June.

According to statistics of the finance ministry, subsidies on oil prices are expected to be around Rs120 billion by the end of the fiscal year.

The government has paid Rs72 billion in price differential claims to oil marketing companies.

On the other hand Indian Prime Minister Manmohan Singh on Tuesday reduced the price of petroleum products by 73 paisa as part of the ‘Mehangai Khatam Karo Scheme’.