ISLAMABAD:
The government bypassed standard pricing formulas to impose heavy taxes and premiums on consumers and further increased the prices of petrol and high speed diesel (HSD) by Rs 27 on Friday.
According to sources at the Oil and Gas Regulatory Authority (Ogra), gasoline prices were not expected to increase according to the standard price formula.
However, the government imposed a huge oil tax of Rs 26.77 per liter of petrol. With this latest addition of around Rs 27, the total tax on petrol has shot up from Rs 80 to Rs 107 per litre.
Similarly, HSD consumers were deprived of potential relief. According to the text of the official notification, diesel prices were supposed to be reduced.
Instead, the government made it more expensive by Rs 26.77 per liter. Sources said that this specific increase in diesel price was implemented to facilitate payment of premiums to Pakistan State Petroleum (PSO).
This sudden and unexpected move sent shockwaves through the industry.
According to sources, the government’s decision completely surprised the oil marketing companies (OMC), which expressed their astonishment at the uncalculated increase in prices.
On Friday, Prime Minister Shehbaz Sharif increased the prices of both HSD and petrol by Rs 27 per liter even though no increase in petrol rates was necessary and to increase its price, the prime minister imposed nearly Rs 27 more per liter fuel tax.
The HSD price was fixed at Rs 380.2 per liter, down from Rs 353.42 per liter. This marked an increase of 7.5%. Diesel prices remained significantly lower than their peak of Rs 520.4 on April 10. HSD is considered the most inflationary fuel due to its widespread use in the transportation and agriculture sectors.
The prime minister approved increasing petrol prices to Rs 393.4 per liter, up from Rs 366.6. This shows an increase of 7.3% over existing prices. Petroleum Division officials said there was no change in petrol prices in the international market and rates had to be increased due to the tax hike.
Meanwhile, the government provided historic relief to kerosene consumers by reducing the fuel price by Rs 63.60 per litre.
After this significant reduction, the new price of kerosene has been fixed at Rs 365.21 per liter. 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.
