Petroleum Product Prices May Rise by Rs28.44
The Oil and Gas Regulatory Authority (OGRA) has calculated a price increase of up to Rs28.44 per liter for petroleum products beginning August 1.
According to regulatory sources, the estimated ex-depot price of petrol may rise by Rs6.53 per liter, high-speed diesel (HSD) by Rs28.44 per liter, kerosene oil (SKO) by Rs11.02 per liter, and light diesel oil (LDO) by Rs5.64 per liter based on the current rate of petroleum levy (PL).
The Finance Division will issue a summary seeking up to an 11% increase in petroleum prices beginning August 1. As per practice, the prime minister will make the final decision in this matter.
Similarly, if the government includes a Rs7 per liter petroleum dealer’s margin in the pricing structure, the price of petrol and HSD will rise even further. The Economic Coordination Committee (ECC) had approved the increased margin of petroleum dealers the day before. The Petroleum Division assured dealers that the government would implement the margin on August 1, 2022.
Petrol prices would rise from Rs230.24 to Rs236.77 per liter, HSD prices would rise from Rs236.00 to Rs264.44 per liter, SKO prices would rise from Rs196.45 to Rs207.47 per liter, and LDO prices would rise from Rs191.68 to Rs197.32 per liter.
It is worth noting that the increase in petroleum product prices corresponds to the increase in their international price.
Currently, the PL on petrol is Rs10 per liter, HSD, SKO, and LDO are Rs5 per litre, and sales tax is zero.
In this regard, the National Assembly has approved an increase in the maximum PL limit from Rs30 per liter to Rs50 per liter in order to meet the Rs750 billion budgetary target set in the Finance Bill 2022-23.
However, sources in the Petroleum Division believe that the government is unlikely to collect Rs750 billion from PL in the current fiscal year at the current rate, as that would imply a monthly collection of Rs14 billion.
Furthermore, if the 17% general sales tax (GST) is not levied on these products, a revenue shortfall of Rs45 billion per month is likely.
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