The Oil and Gas Regulatory Authority (Ogra) Friday recommended hefty increase in prices of petroleum products following the recent fluctuation in global oil prices. The regulator recommended an increase of Rs 4.06 per litre (5.2%) in the price of petrol, Rs 6.03 per litre (16 percent) in high speed diesel (HSD), Rs 13.58 per litre (23.6%) in the price of superior kerosene oil (SKO) and Rs 12.49 per liter (24%) in the price of light diesel oil (LDO).

In case the government approved the regulator''s recommendations regarding increase in prices of petroleum products, the price of petrol will go up to Rs 81.53 per litre from the current Rs 77.47 per litre. The prices of SKO will go up to Rs 71.16 per litre from the existing Rs 57.58 per litre and the price of LDO will go up to Rs 64.61 from existing Rs 52.12 per litre.

After deregulation of HSD, the increase in Pakistan State Oil''s (PSO) weighted average ex-refinery price of HSD along with its IFEM has been worked out to be effective from January. The PSO increased ex-refinery price of HSD by Rs 5.83 per litre and increase of Rs0.21 per litre in freight rates. After the increase, the weighted average price of the HSD will go up to Rs 57.10 from existing Rs 51.27 per liter and IFEM''s price will increase from Rs 1.26 to Rs 1.46 per litre. The government has also deregulated margins of oil industry on high speed diesel and they would determine its price based on weighted average price of the PSO. The consumers are likely to face hike of 16 percent increase in price of HSD.

The Ogra recommended that an overall increase in the prices of petroleum products of up to 23.6 percent after the rates of crude oil surged in the international market. The Ministry of Energy (Petroleum Division) received a summary from the Ogra on Friday that recommended an upward revision in oil prices.

The government has burdened petroleum consumers with general sales tax and petroleum levy. The Ogra proposed GST rate on various products at 17 percent to maintain price stability and earn higher revenue. On the recommended prices of Ogra, the Federal Board of Revenue (FBR) will charge 17 percent GST on petrol including LDO and SKO. Apart from 17 percent GST, the government is also charging petroleum levy up to Rs 10.00 per litre on prices of oil products.

According to the Ogra recommendations, the budgeted petroleum levy is Rs 10 per litre on petrol, Rs 6.00 per litre on SKO and Rs 3.00 per litre on LDO. The summary was forwarded to the Finance Ministry and Prime Minister''s office for a decision as oil prices are to be revised tomorrow (December 31).

Copyright Business Recorder, 2017