The decision has been taken on the directives of Prime Minister Nawaz Sharif. Dar said the Ministry of Petroleum & Natural Resources and Oil and Gas Regulatory Authority (OGRA) had recommended an increase in prices by 0.5 percent in motor spirit 92 RON petrol, 5.2 percent in high speed diesel, 16 percent in kerosene oil and 8 percent in LDO with effect from 1st January 2017.
The increase recommended by OGRA was Rs 0.31 per litre increase in RON 92 petrol, Rs 3.94 per litre in high speed diesel (HSD), Rs 3.48 per litre in light diesel oil (LDO) and Rs 6.93 per litre in kerosene oil. The proposed increase in prices of kerosene, LDO and petrol was based on the reduced sales tax rates on these three petroleum products.
In case the full sales tax at 17 percent is levied on these products, the increase in these products worked out to be Rs 14.31 per litre in kerosene oil, Rs 10.11 per litre in LDO, and Rs 1.77 per litre in petrol price. In order to maintain stability since April 2016, prices have been maintained despite fluctuation in international prices and the government has been absorbing the negative financial impact due to it decisions of not passing increases to the end consumers.
Only partial increase in motor spirit petrol and HSD, which had been recommended by OGRA, was passed on to the end consumers for only the month of December 2016. In line with the Prime Minister's instructions to provide maximum relief to the common man and keeping in view that kerosene oil and LDO are used by the low income people, it has been decided to maintain the prices of kerosene and LDO at current level for the entire month of January. The government also decided that the prices of RON 92 petrol and HSD will be frozen and remain unchanged at the current level till midnight of mid January 2017.
Copyright Business Recorder, 2017