- Government to approve increase in Petroleum, Oil and Lubricant prices after strong pressure from oil marketing companies
by AHMAD AHMADANI
Oil and Gas Regulatory Authority (OGRA) has worked out a hike up to Rs 6.82 per litre in the prices of all petroleum products except Light Diesel Oil (LDO), and forwarded the paper to government for final approval.
Sources disclosed to this scribe that the regulator (Ogra) has forwarded working paper regarding oil prices for next month to the ministry of petroleum & natural resources and recommended upward revision in the prices of Petroleum, Oil and Lubricant products (POL) except the price of LDO. However, the final decision has to be taken by the cabinet and Prime Minister before the start of December.
According to OGRA’s working paper, the sources said the price of High Octane Blended Component (HOBC), mainly used in luxury cars, may face a hike of Rs 6.82 per litre, which would take the price to Rs 79.54/litre from the existing Rs72.72/litre.
More significantly, consumers of High Speed Diesel (HSD), which is mostly used in the transport and agriculture sectors, may face a hike of Rs 5.42 per litre, which would take its price to Rs77.94 per litre from the existing Rs72.52. Similarly, petrol prices are to go up from the existing Rs64.27 to Rs68.28 per litre, an increase of Rs4.01, and the price of kerosene oil (SKO), used for cooking purposes in remote areas where liquefied petroleum gas is not readily available, is to rise from Rs43.25 to Rs46.06 per litre with an increase of Rs2.81/litre.
However, LDO, mainly used for industrial purposes, may record a decrease of 13 paisa, meaning the price will go down from Rs 43.34 to Rs 3.21 per litre, they added.
Sources further said that the government has the capability to absorb the impact of the proposed increase in oil prices by adjusting tax rates on petroleum products. However, oil marketing companies (OMCs) have repeatedly asked the government to jack up the prices of petroleum products (POL) apparently to earn inventory gains. They said the OMCs have gone all out to convince the government to approve the increase in POL prices, partly due to import of RON 92 petrol to the country.
Official sources at the finance ministry said on condition of anonymity that the government would approve the price hike due to the constant demand of the OMCs regarding oil prices.
It is pertinent to note here that the country had imported RON 87 petrol, which is low quality petrol and largely abandoned by the world. So, the ECC allowed import of RON 92 standard petrol to the country in order to make the environment cleaner, more hygienic, improve efficiency of vehicles and give good mileage per litre. And, following the approval of federal cabinet’s Economic Coordination Committee (ECC), Research Octane Number (RON) 87 has been replaced with RON 92 standard petrol. The new RON 92 cleaner and efficient fuel is available in open market and has lower carbon emissions.
