ISLAMABAD: With the government desisting from increasing prices of petroleum products at the start of the new year, the impending hike, following the trend of rising oil prices in the international market, was announced on Tuesday, as rates were jacked up by up to six per cent.
Oil and Gas Regulatory Authority (Ogra) has raised the price of petrol by Rs5.37 per litre, High Speed Diesel (HSD) by Rs 4.64 per litre, High Octane Blending Component (HOBC) Rs6.29 per litre, kerosene oil Rs2.78 per litre and Light Diesel oil (LDO) Rs 3.43 per litre in line with global oil prices.
After raise, the new price of petrol will stand at Rs94.91 per litre, kerosene oil Rs92.02 per litre, HOBC Rs118.20 per litre, LDO Rs90.21 per litre and HSD Rs103.46 per litre.
Sources said that Ogra had recommended keeping oil prices unchanged to provide relief to the consumers, using the petroleum levy collected to balance out the cost. However the Finance Ministry rejected it and moved to raise oil prices.
It is interesting to note that Ogra had calculated increase of Rs 3.11 per litre in price of High Speed Diesel (HSD) in line with hike in global oil prices but government increased its price by Rs 4.64 per litre in a bid to increase the rate of Petroleum Levy (PL) to earn more revenue.
Crude jumps in international market
The average price of crude oil jumped by $4 per barrel, from $ 110 per barrel in December 2011 to $ 114 per barrel in January 2012.With the rupee also depreciating by 1.2 per cent from Rs 89.3 in December 2011 to Rs 90.3 per dollar in January 2012, the cumulative hike multiplied.
Despite a decline in international oil prices, the government had also raised prices of petrol by Rs1.65 per litre and high octane blending component (HOBC) Rs5.13 per litre for ongoing month of January. Prices of other petroleum products were kept unchanged.
Federal government has already deregulated the prices of petroleum products of MS, HOBC, LDO, JP-1, JP-4 and JP-8 effective from June 1, 2011. Refineries and Oil Marketing Companies (OMCs) are allowed to fix and announce their ex-refinery price and ex-depot prices of these products on monthly basis keeping in view import parity price in controlled deregulation mechanism.
Government though still notifies prices as Inland Freight Equalisation Margin (IFEM) and Petroleum Levy (PL) are regulated activity.