ISLAMABAD: Amid heavy rainfalls creating flood situation in various parts of the country, Prime Minister Imran Khan on Monday froze the prices of petroleum products for September with a Rs17 billion revenue loss to the government.

Sources said the Oil and Gas Regulatory Authority (Ogra) and the ministries of petroleum and finance had proposed an increase of Rs9.35 and Rs9.50 per litre in the prices of petrol and high speed diesel (HSD), respectively, on the basis of maximum permissible taxes for 15 months.

However, the prime minister rejected the proposal and wrote “No Price Change for this whole month” on the file.

“Prime Minister Imran Khan didn’t approve the recommendation of Ogra, Petroleum and Finance Division for increase in prices of petroleum products,” said the Prime Minister Office in a statement.

Govt to bear revenue loss of Rs17bn

The prime minister said that people were already facing high food inflation and need some reprieve, especially because of heavy rains. He said the “government would have to forego Rs17 billion in taxes which would be given as subsidy to people to moderate their burden”.

As such, the ex-depot prices of HSD and petrol would remain unchanged at Rs106.46 and Rs103.97 per liter, respectively. Likewise, the ex-depot price of light diesel oil (LDO) and kerosene would also remain the same at Rs62.86 and Rs65.29 per liter, respectively.

To do so, the government had to make downward adjustment in petroleum levy rates for petrol, HSD and LDO and increased the levy on kerosene to keep the prices unchanged. As such, the levy on petrol was slashed by Rs5 per liter to Rs21.70 per liter from Rs26.70 in August.

Likewise, the levy on HSD was reduced by Rs3.85 to Rs21.88 for September from Rs25.73 per liter. The petroleum levy on LDO was also cut by 59 paisa per liter to Rs2.41. The levy was also increased by Rs4.51 on E-gasoline to Rs20.78 from Rs25.29 per liter.

On the other hand, the petroleum levy was increased by Rs1.23 on kerosene to Rs7.23 from Rs6per liter.

The sources said Ogra had prepared its working paper on oil prices based on revised formula on fortnightly revision to pass on international prices published in Platt’s Oilgram instead of monthly calculations on the basis of import cost of Pakistan State Oil at present.

They said the authorities would re-determine the prices for oil companies and taxation purposes on September 15 but the consumer-end prices would remain the same until the end of this month.

The petrol and HSD are two major products that generate most of revenue for the government because of their massive and yet growing consumption in the country.

Published in Dawn, September 1st, 2020