The Oil and Gas Regulatory Authority (OGRA) has worked out an increase of 2.7 percent to 7.3 percent in POL products due to an increase in international oil market prices, recommending an increase of between Rs 2.75 and Rs 8.67 per litre for various products with effect from March 1.
An official source said OGRA had estimated an increasing trend in international POL prices, as they had risen during February while the rupee had devalued against the dollar in the same period.
OGRA has hinted at an increase in the price of motor spirit (petrol) by 2.9 percent or Rs 2.75 per litre, which will take the sale price to Rs 97.66 per litre, High Octane Blended Component (HOBC) by 7.3 percent or Rs 8.67 hike to Rs 126.87 per litre, High Speed Diesel (HSD) by 2.7 percent or Rs 2.82 from Rs 103.46 to Rs 106.28 per litre, Light Diesel Oil (LDO) by 3.4 percent or Rs 3.08 to Rs 93.29 per litre and Super Kerosene Oil (SKO) by 4.8 percent or Rs 4.38, which would raise the sale price to Rs 96.40 per litre.
OGRA, the source said, had again recommended retaining the prices of POL products at the current level and adjusting the differential through the GST and petroleum levy.
The Petroleum Ministry and OGRA have been recommending absorbing the shock through taxation on POL products, but the Ministry of Finance, faced with a massive fiscal deficit of over six percent, has been opposing the recommendation for the last several months.
The source said the Petroleum Ministry was supporting OGRA’s recommendation by stressing that the reduction in levy on petrol and diesel could help bring their prices at par with CNG and help reduce the demand for natural gas. However, the Finance Ministry had rejected the proposal last month. The government collects Rs 23 billion per month from taxation of POL products. It collects Rs 16 billion per month in sales tax on POL products, while another Rs 7 billion are collected in petroleum levy.
It’s going to be more than a bomb!
