The Oil and Gas Regulatory Authority (OGRA) has proposed an increase of up to Rs28.44 per litre in the prices of petroleum products with effect from August 1.
Based on the current rate of petroleum levy (PL), the estimated ex-depot price of petrol may climb up by Rs6.53 per litre, high-speed diesel (HSD) by Rs28.44 per litre, kerosene oil (SKO) by Rs11.02 per litre and light diesel oil (LDO) by Rs5.64 per litre.
The Finance Division will present a summary today (Saturday) seeking a petroleum price hike of up to an estimated 11 percent, to take effect from August 1. As usual, the prime minister will make the final decision on this matter.
If the government includes the Rs7 per litre petroleum dealer’s margin in the pricing structure, the price of petrol and HSD will go up. The Economic Coordination Committee (ECC) had approved the increased margin of petroleum dealers. The Petroleum Division had assured the dealers the government will implement the margin with effect from August 1, 2022.
The recent increase in international prices of petroleum products has led to a corresponding increase in the prices of these products in our country. For example, the price of petrol has gone up from Rs230.24 to Rs236.77 per litre, while the price of HSD has increased from Rs236.00 to Rs264.44 per litre. This trend is likely to continue in the near future.
At present the PL on petrol stands at Rs10 per litre, on HSD, SKO and LDO at Rs5 per litre each while sales tax is zero.
The National Assembly has recently approved an increase in the maximum limit of petroleum levies (PL) from Rs30 to Rs50 per litre, in order to meet the budgetary target of Rs750 billion set in the Finance Bill for 2022-23.
However, sources within the Petroleum Division have indicated that the current rate is unlikely to generate the projected Rs750 billion in revenue for the current financial year, meaning that a maximum of only Rs14 billion could be collected each month.
Additionally, a revenue shortfall of Rs45 billion per month was likely if the 17 per cent general sales tax (GST) is not slapped on these products.