ISLAMABAD: The government has increased petrol price by Rs2.31 to Rs106 per litre and diesel rate by Rs1.80 to Rs110.24 per litre for the first fortnight of year 2021.

The ministry of finance has notified the new rates while the information team for the head of the government used the occasion to highlight the performance of Prime Minister Imran Khan.

An official message released by PM Office said: “Keeping in view the relief of the people, Prime Minister Imran Khan approved the minimum increase in petroleum products contrary to the recommendations of OGRA.”

The Oil and Gas Regulatory Authority (Ogra) had recommended an increase of Rs10.68 per litre in petrol price and Rs8.37 per litre in diesel rate.

However, the government made an increase of only Rs2.31 per litre for petrol and Rs1.80 per litre for diesel.

Similarly, Ogra had proposed an increase of Rs10.92 per litre in kerosene price and Rs14.87 per litre in the rate of light diesel oil, that is consumed by certain variants of engines used mostly to operate small mills.

However, the government increased kerosene price by Rs3.36 to Rs73.65 per litre and light diesel oil rate by Rs3.95 to Rs71.80 per litre.

The increase in diesel prices will take its toll on most of commercial activities, including trucking, railways and loading vehicles like tractors. The increase in diesel and kerosene prices will create budgetary imbalances for the armed forces too as the army is major consumer of diesel and uses it in trucks to tanks.

The calculations by Ogra were made in line with the increase of oil prices at the international market and prices of crude oil during December.

A senior official of the petroleum division said that the petrol price buildup in the last 15 days had been $2.7 per barrel to about $52 per barrel compared to the preceding fortnight. Similarly, the average diesel price in last 15 days was around $54 per barrel that was $3 higher against the previous fortnight.

The official said that the crude oil prices were expected to remain close to $50 per barrel in the coming fortnight, signifying that that the oil prices in the country would further increase after January 15.

To balance between the price hike and the calculations made by Ogra, the government has reduced the petroleum levy.

Meanwhile, the government has also notified the prices of liquefied petroleum gas (LPG) for January at Rs15,237 per tonne, with an increase of Rs16 per kg.

The increase in LPG price will incur financial burden to the residents who utilise the LPG cylinders for cooking and heating in the chilly months.

Chairman of the LPG Association of Pakistan Irfan Khokhar in a statement said that the government had to devise a long term LPG policy to protect the people from financial burden in winter months when there was loadshedding of gas in urban areas and the residents of un-served areas had no option but to use LPG for heating also.

Published in Dawn, January 1st, 2021