ISLAMABAD - The Oil and Gas Regulatory Authority (Ogra) on Wednesday recommended an increase of Rs12.50 per litre in the price of high speed diesel and Rs8.37 per litre in the price of motor spirit (petrol) for the month of June.

In a summary moved to the Ministry of Energy (Petroleum Division) and Finance, the Oil and Gas Regulatory Authority (Ogra) proposed an upward revision in oil prices and recommended up to 16.9 per cent increase in prices of different petroleum products.

According to the Ogra’s summary, an increase of Rs12.50 (12.7pc) was recommended in the price of HSD and Rs8.37 per litre (9.5pc) in the price of motor spirit (petrol). Similarly, Rs8.23 per litre (10.3pc) increase was recommended in the prices of kerosene oil and Rs 11.65 (16.9pc) in light diesel oil (LDO) rate. Prices of all petroleum products, except for kerosene, are deregulated and Ogra only monitors their prices.

The government has the capability to absorb the impact of the proposed increase in oil prices by adjusting tax rates on petroleum products. The final decision regarding the POL prices will be taken by Prime Minister Shahid Khaqan Abbasi on Thursday (today).

This is the last time that the present government will determine the oil prices and if approved the rate of HSD, which is mostly used in the transport and agriculture sectors, after an increase of Rs12.50 (12.7%), will go up to Rs111.26 per litre from the existing Rs98.76per litre. Similarly, the price of petrol, after the increase of Rs 8.37, will go up from the existing Rs87.70 to Rs96.07per litre. The price of kerosene, with the incorporation of OGRA recommended increase of Rs 8.23, will go up from the current Rs79.87 per litre to Rs88.10 per litre. Kerosene oil is used for cooking purpose especially in remote areas where LPG or pipeline gas is not available.

Similarly, LDO price, after an increase of Rs11.65, will go up from Rs68.85 to Rs80.50 per litre. LDO is mainly used for industrial purposes.

Currently, the government is charging two types of taxes on petroleum products which are petroleum levy and general sales tax. But the finance ministry may oppose any proposal for keeping oil prices unchanged during the latest revision, because it would affect the country’s revenues. At present, the government is charging Rs 8 per litre petroleum levy on HSD, Rs 10 per litre on petrol, Rs 6 per litre on kerosene oil and Rs 3 per litre on LDO. In addition, General Sales Tax of various percentages is also being charged on the petroleum products. Currently against the standard rate of 17 percent GST the government is collecting 27.5 percent sales tax on high speed diesel, 15 percent on motor spirit, 12 percent on kerosene and 11.5 percent on light diesel oil.