ISLAMABAD: The government on Tuesday increased the prices of all petroleum products by up to four per cent for next 15 days to pass on partial impact of increase in international prices.
According to a notification issued by ministry of finance, the ex-depot price of petrol has been increased by Rs2.13 per litre and that of high speed diesel (HSD) by Rs1.79 per litre. The ex-depot price of kerosene has been increased by Rs1.89 per litre and that of light diesel oil (LDO) by Rs2.03 per litre.
As such, the ex-depot rate of petrol has been fixed at Rs110.69 per litre instead of Rs108.56 per litre at present, showing an increase of 1.96pc. Likewise, the ex-depot HSD price has been set at Rs112.55 per litre from existing rate of Rs110.76 per litre, up 1.6pc.
Similarly, the ex-depot price of kerosene has been fixed at Rs81.89 per litre instead of existing rate of Rs80, showing an increase of 2.36pc. The ex-depot price of LDO has been set at Rs79.68 per litre instead of Rs77.65, up 3.9pc.
The government had to reduce its tax on petrol and diesel to allow a minimum increase. Otherwise based on existing rates, the Oil and Gas Regulatory Authority (Ogra) had worked out significantly higher prices. For example, it had worked out the price of HSD to go up by Rs5.58 per litre and that of petrol by Rs4.27 per litre. Similarly, Ogra had worked out an increase of Rs3.77 and Rs4.05 per litre in kerosene and LDO prices, respectively.
The government had already collected higher than targeted revenue on petroleum products through petroleum levy in the 11 months of the current fiscal. Therefore, it was comfortable with minor adjustments in petroleum levy.
According to the ministry of finance, the collection on account of petroleum levy had amounted to Rs370 billion in first nine months of the current fiscal against annual target of Rs450bn. The actual collection through petroleum levy has now been revised to Rs500bn as part of budget 2021-22.
Over the last two years, the government has been tweaking with petroleum levy rates instead of GST as the levy remains in the federal kitty while GST goes to the divisible pool taxes and thus about 57pc share is received by the provinces.
Petrol and HSD are two major products that generate most of revenue for the government because of their massive and yet growing consumption in the country.