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Fuel prices likely to increase tomorrow

OGRA prepares separate summary for maintaining POL prices

The government is likely to jack up prices of petroleum products from January 16. In this regard, the Oil and Gas Regulatory Authority (OGRA) has prepared a working paper regarding the prices of petroleum products.

According to reports, two proposals have been prepared by OGRA for January 16. By increasing the levy, the prices of petroleum products have increased, due to which the price of diesel may increase. The Rs32.5 per liter levy on diesel can be increased to Rs50. According to the second proposal, the OGRA could also propose maintaining the prices of petroleum products.

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The proposals will be sent to the government today (Sunday) and the final decision regarding the prices will be taken by Finance Minister Ishaq Dar in consultation with the prime minister. It should be noted that the price of crude oil in the international market is $97 per barrel.

After the increase, the price of petrol is expected to go up by Rs8.98 per liter, while the price of high-speed diesel (HSD) may rise by Rs1.06 per liter in the upcoming fortnightly revision.

At present, the government is charging consumers Rs50 per liter as petroleum levy on petrol and Rs32.5 per liter on HSD.

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However, no general sales tax is collected on the sale of petroleum products, which include petrol, HSD, high octane blending component, kerosene oil and light diesel oil.

Apart from the petroleum levy, inland freight equalization margin has been fixed at Rs3.51 per liter on the sale of petrol and at Rs0.81 per liter on the sale of HSD.

Furthermore, oil marketing margins of Rs5 per liter are collected on the sale of petrol and HSD, while the commission of dealers has been set at Rs7 per liter for the two petroleum products.

Exchange rate adjustment for major oil importer Pakistan State Oil (PSO) is estimated at Rs5 per liter on petrol and Rs3.50 per litre on HSD. Over the past 12 days, the rupee has depreciated from Rs225.93 to Rs227.72 per dollar.

According to reports, if the government opts to increase the price of petrol and HSD by Rs8.98 and Rs1.06 per liter, respectively, petrol cost will go up from Rs214.80 to Rs223.78 per liter, while HSD will cost Rs228.86 per liter compared to the current price of Rs227.80.

Contrary to petrol and HSD, the price of kerosene oil is likely to edge down by Rs3.10 to Rs168.73 per liter and that of light diesel oil by Rs2.39 to Rs166.61 per liter for the second half of January 2023.

Keeping in view the country’s energy demand, about 430,000 tons of mogas (motor gasoline or petrol), 200,000 tons of HSD and 650,000 tons of crude oil are imported every month at a cost of around $1.3 billion.

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