ISLAMABAD: The government decided on Thurs­day to keep the prices of petrol and high octane blending component (HOBC) unchan­ged for January. However, it reduced the rates of all other petroleum products, including diesel.

The new prices were approved by Prime Minister Nawaz Sharif and announced by Finance Minister Ishaq Dar.

In order to provide relief to the public and rationalise rates, the government has decided not to raise the prices of petrol and HOBC and reduce those of kerosene, light diesel oil (LDO) and high speed diesel (HSD), Mr Dar said.

The Oil and Gas Regulatory Authority (Ogra) had recommended an increase of Rs2.17 per litre in the price of petrol and a reduction of Rs4.33 in that of HOBC.

An official at the finance ministry told Dawn that the government would be providing a subsidy of Rs1.19 billion for maintaining the price of petrol.

“The government is not benefiting significantly by not reducing the price of HOBC and the gains of maintaining its price amount to Rs17.87 million only because its consumption is not even one per cent of the sale of petrol in country,” the official said.

On the other hand, an official at the petroleum ministry said the government was getting a significant amount of Rs1.75bn by not completely passing on to consumers the reduction in price of HSD suggested by Ogra.

The regulator had recommended a decrease of Rs5.93 per litre the price of HSD, but the government reduced its price by only Rs3 and the remaining Rs2.93 had been kept as cross-subsidy for maintaining the price of petrol, the official said.

The official said the amount to be received from Rs2.93 per litre was huge because around 500,000 tons diesel was likely to be consumed in the country in January.

Diesel consumption rises to 900,000 tons in October, November and December and to one million tons in April, May and June because of Rabi and Kharif harvest seasons respectively.

HSD is mostly consumed in tractors, trucks, buses and generators.

The price of petrol will remain unchanged at Rs76.26 per litre and that of HOBC at Rs80.66 for the month of January.

The price of HSD has been reduced by Rs3 to Rs80.79 per litre, kerosene by Rs8.07 to Rs48.25 and LDO by Rs8.29 to Rs44.94.

LDO is a fuel for old model engines and farm machineries used to operate tubewells and small mills.

Published in Dawn, January 1st, 2016