The prices of petroleum products in the international market showed a record surge during the last fortnight, which has completed the GoP to pass on partial increase to the consumers.
However, in order to share the burden of the masses, the government would absorb half of the increase in the prices of petroleum products by providing the petroleum products on subsidised rates.
As per the Ogra announcement on Sunday, the petrol price has been raised from Rs 56.29 to 57.70 per litre.
The rate of kerosene has been increased from Rs 32.87 to 35.23 per litre, while the price of diesel has been raised from Rs 37.18 per litre to Rs 38.73 per litre. The spokesman said that Pakistan imports 82 percent of its oil requirement and the record rise in prices in the international market is main cause of increase in the domestic prices.
According to Ogra spokesman, the government had already suffered revenue losses of around Rs 66 billion due to capping of prices from May 2004 to December 2004 and again in October 2003 till to date.
The government would now share a burden of Rs 2 billion in order to soften effect of this increase on the masses.
The spokesman said that government is providing kerosene on subsidised rates to the common man. He said the government is now proving subsidy of Rs 8.94 per litre in the head of kerosene.
The subsidy on light diesel rate is now Rs8.06, while on diesel it is Rs4.43 per litre. The spokesman said the international market saw 81 percent increase in the petroleum prices during the recent two years, while the Government of Pakistan has raised the prices by 52 percent. The increase in kerosene in international market was recorded at 113 percent, while Pakistan increased the rates only 37 percent. The rise in the prices of diesel in the international market was recorded at 122 percent while Pakistan government introduced the raise at only 53 percent.
The spokesman said Pakistan also introduced lesser increase in the prices of petroleum within the region, as the petroleum prices in India were still higher than that of Pakistan.
In India, the spokesman said, the petroleum rate is Rs 65 per litre (as per Pakistani currency) while Pakistan providing the petroleum at Rs 57.70 even after the recent increase.
The diesel rates in India stand at Rs46.78 while Pakistan is providing diesel rates of Rs38.73 after the recent price fluctuation.
It is pertinent to mention here that Ogra has changed the petroleum rates for the first time after it was given the task. Previously, the advisory committee of the oil companies use to decide petroleum prices. Ogra is calculating the prices of petroleum products in accordance with meters prescribed by the formula approved by the Government which include ex-refinery price, excise duty, company and dealers margin, inland freight equalisation margin, petroleum development levy and sales tax.
In order to ensure the accuracy of the inland freight cost managed by the companies, Ogra has directed all Chief Executives of oil companies to certify the actual transportation cost which would be subsequently audited by Ogra to check the veracity of their claim under the self managed freight pool system.