OCAC held a meeting on Friday in Karachi and according to the released statement said that the increasing trend of the petroleum prices in the international market since May 2004 has resulted in Government of Pakistan absorbing Rs 68.5 billion by totally eliminating the petroleum development levy (PDL) and in addition on payment of price differential claims (PDC) of the oil industry through financial arrangements.
The government spokesman stated that the OCAC during the current fiscal year suffered revenue loss of Rs 10.5 billion on account of PDL and PDC. Had this minor increase not been passed on, the government would have suffered additional Rs 1.2 billion on account of further payments to the oil industry. The continued burden would have deprived other social sectors, development programmes and poverty reduction programmes of the government.
While prices of diesel in the international market increased by 92 percent since May 2004, a partial increase of 42 percent was passed on to the consumers. Similarly, prices of petrol increased by 68 percent but the increase passed on by the government was only 42 percent.
The spokesman added that as part of the balancing measures; the government in line with the policy to pass on some and absorb substantial increase has decided to pass on partial increase in the prices of petroleum products.
The spokesman said that this measure would stop financial haemorrhaging on account of regular payments to the oil industry for PDC.
In the current fortnight the government would continue to pay PDC to oil marketing companies to subsidise the price of diesel by Rs 2.17 per litre, kerosene by Rs 5.33 per litre and LDO by Rs 4.08 per litre.
The past fortnights showed an increasing trend due to various factors such as the hurricane Katrina, Rita, refining constraints and speculations starting on winter buying.
At present the balance claim for the oil industry on account of price differential claims stands over Rs 7 billion.
Meanwhile, Pakistan State Oil and Shell Pakistan Ltd have also raised high speed diesel (HSD) price by 7.49 percent or 2.59 rupees to Rs 37.18 per litre.
The ex-depot sale price at 29 designated locations effective from October 1, 2005 would be as under in rupees per litre:
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Product New Old Increase
Motor spirit 56.29 52.61 3.68
HOBC 62.77 58.40 4.37
Kerosene 32.87 31.00 1.87
Light diesel oil 30.97 29.22 1.75
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