Petroleum products’ prices set to rise in July

ISLAMABAD: Prices of domestic petrol, diesel and kerosene oil are likely to be increased between Rs6 to Rs7.5 per litre for the month of July due to increase in the crude oil prices at the international markets, the Oil and gas Regulatory Authority (Ogra) has calculated.

The petroleum product pricing for the month of July would be the first oil prices to be announced by the government with imposition of carbon surcharge replacing the petroleum development levy (PDL).

Informed sources told Dawn that the OGRA calculations forwarded to the petroleum ministry said that the prices of petrol would increase by Rs6.2 per litre, Rs6.5 per litre on light diesel, Rs7.5 per litre on kerosene oil.

While for the most consumed petroleum product the high speed diesel (HSD) the state owned oil marketing the PSO has calculated an increase of Rs6 per litre on HSD.

‘The HSD prices are not determined by Ogra as it was a deregulated product and the oil companies do it themselves,’ said an Ogra official adding that the final decision was made by the government.

Crude oil prices in international markets have increased by around $10 per barrel to more than $69 per barrel at the gulf markets during the month of June against May.

The official said that the increase calculated by the Ogra and the PSO would be passed on to consumers as the PDL would be abolished from July which was flexible tax and the government could reduce the PDL if the pass-on was to be avoided.

Currently the PDL on key products was Rs10.54 per litre on petrol (motor spirit MS), Rs6.88 per litre on kerosene oil, Rs3.95 per litre on Light Diesel Oil (LDO) and Rs14.32 per litre on HOBC. While the PDL on high speed diesel is Rs8.53 per litre.

‘However carbon surcharge is a fixed variable but it also brings transparency in the system,’ said state minister for finance and economy Hina Rabbani Khar, adding that the new tax would also be supportive in rationalising oil imports.

The government estimates that Rs122 billion would be collected from the newly introduced carbon surcharge in the fiscal 2009-10 from the petroleum products.

Incidentally the rate of carbon surcharge was very close to the current value of PDL as it is Rs10 per litre on petrol (motor spirit MS), Rs6 per litre on kerosene oil, Rs3 per litre on Light Diesel Oil (LDO), Rs14 per litre on HOBC and for high speed diesel (HSD) it is Rs8 per litre. link....