ISLAMABAD - As a New Year gift, Prime Minister Nawaz Sharif has turned down a summary forwarded by the Oil and Gas Regulatory (OGRA) Authority recommending an increase in prices of petroleum products up to 16 percent.

The price of petrol and high-speed diesel (HSD) would remain unchanged till January 15 and prices of kerosene oil and light diesel would stay the same during the entire month of January. By deferring to jack up the prices, the government would bear an additional cost of Rs4 billion in term of tax collection.

The government has also decided to review the decision of fixing oil prices on a fortnight or monthly basis.

Earlier, the OGRA had proposed to enhance the petrol price by 0.47 per cent or Rs0.31 per litre. Similarly, it had recommended increasing the HSD price by 5.24 per cent or Rs3.94 per litre. The OGRA had also suggested increasing price of kerosene oil by 16.02 per cent or Rs6.93 and light diesel oil (LDO) price by 8.02 per cent or Rs3.48 per litre.

The proposed increase in prices of kerosene, LDO and MS petrol were based on reduced sales tax rates on the three petroleum products. In case the full sales tax at a rate of 17 percent was levied on these products, the increase would have been Rs14.31 per litre in kerosene price, Rs10.11 per litre in LDO and Rs1.77 in MS petrol prices.

The petrol price would remain at Rs66.27 per litre and HSD at Rs75.22 per litre, kerosene at Rs43.25 per litre and LDO at Rs43.35 per litre.

"In order to maintain stability since April 2016, prices have been maintained despite fluctuation in international prices and the government has been absorbing the negative financial impact due to government's decisions for not passing on increases to the end consumers. The only partial increase in MS petrol and HSD of what had been recommended by OGRA was passed on to the end consumers for only the month of December 2016," Finance Minister Ishaq Dar said in a statement.

He said in line with the prime minister's instructions to provide maximum relief to the common man and keeping in view that kerosene and LDO are used by the low-income people, it has been decided to maintain their prices at the current level for the entire month of January 2017.