ISLAMABAD - Oil and Gas Regulatory Authority Wednesday revised the fares for oil transportation and allowed up to 64 percent increase in freight rates for oil tankers, The Nation has learnt reliably.

The deadlock between the government and oil tanker association over the increase of freight charges is over as the Ogra has agreed to allow an increase of 19.7 percent to 63.9 percent in fares of different slabs of oil transportation, official sources said.

The agreement was reached here at a meeting between the officials of the ministry of petroleum, Ogra and All Pakistan Oil Tanker Owners Association (APOTA) and Oil Tankers Contractor Association (OTCA) here. The meeting discussed various issues related to oil tankers, including freight charges, upgrade of oil tankers, licensing issue etc. A notification regarding the revised prices has been issued.

The increase will be applicable from November 1 and will stay in effect for next two years, said Nauman Ali Butt, general secretary, Oil Tankers Contractor Association (OTCA). He said for the cities the increase would be 63.9 per cent while for long distance it would be 19.7 percent. 

According to the notification, five different slabs were revised. Now slab-I is 0-137km, slab-II 138-560km, slab-III 561-1979km, slab-IV 1980 to onwards and slab-V hilly areas. It was decided to increase the rates for first slab by 63.9 percent, slab-II 19.6 percent and for the rest 19.7 percent.

Nauman Ali Butt further said the freight rate for the Gilgit-Baltistan and AJK would remain the same and would be negotiated by the end of November.

On the issue of other regulations, All Pakistan Contractors Association executive committee member Salman Tareen said they have told the Ogra that they are ready to adopt all the regulations of the regulator, but this would be possible in phases with justified timeframe. Regarding freight charges, he said the rates were fixed in 2011 and there had been no increase for the past six years. The increase would provide a breathing space to the oil tanker owners, he added.

When asked about the impact of increase in freight rates in the oil prices, the source said it would be negligible. If the oil tanker is charging Rs 2,200 for short distance, an increase of 64 percent would mean only an increase of pennies per litre, the source maintained. However, another source in the ministry said that it would be around one rupee per litre.