ISLAMABAD:
The government circumvented standard pricing formulas to impose heavy taxes and premiums on consumers by further increasing prices of petrol and high-speed diesel (HSD) by Rs 27 on Friday.
According to sources in the Oil and Gas Regulatory Authority (Ogra), petrol prices are not expected to increase under the standard pricing formula.
However, the government imposed a massive oil tax of Rs 26.77 per liter of petrol. With this latest addition of around Rs27, the total levy on petrol has increased from Rs80 to Rs107 per litre.
Similarly, HSD consumers were deprived of possible relief. According to the text of the official notification, diesel prices were to be reduced.
Instead, the government made it more expensive at Rs 26.77 per litre. Sources said this specific hike in diesel price was implemented to facilitate payment of bonuses to Pakistan State Oil (PSO).
This sudden and unexpected decision sent shock waves through the industry.
According to sources, the government’s decision came as a complete surprise to the oil marketing companies (OMCs), who expressed astonishment over the uncalculated price hikes.
Prime Minister Shehbaz Sharif on Friday increased the prices of HSD and petrol by Rs 27 per liter despite the fact that no increase was required in petrol rates and to hike its price, the Prime Minister imposed almost Rs 27 per liter additional tax on fuel.
The price of HSD has been fixed at Rs 380.2 per liter from Rs 353.42 per litre. This represents an increase of 7.5%. Diesel prices were still significantly lower than their peak of Rs520.4 on April 10. HSD is considered the most inflationary fuel due to its widespread use in the transportation and agricultural sectors.
The Prime Minister approved the increase in petrol prices to Rs 393.4 per liter from Rs 366.6. This represents an increase of 7.3% over the existing prices. Petroleum Division officials said gasoline prices had not changed in the international market and the rates had to be increased due to an increase in tax.
The government, meanwhile, provided historic relief to kerosene consumers by reducing the price of the fuel by Rs 63.60 per liter.
Following this significant reduction, the new price of kerosene has been fixed at Rs365.21 per litre. This is the second consecutive week of significant relief for kerosene users, following a price reduction of Rs 21.34 per liter announced last week.
