Oil and Gas Regularity Authority has asked the government to raise the prices of petroleum products by as much as 20% from July 2016. OGRA has based its proposal on the increasing price of crude oil in the international market. The proposal includes an increase in different petroleum products from Rs. 1.93 to Rs. 8.63 per liter. Lately, in the months of May and June 2016, OGRA had twice proposed the government to raise the petroleum prices but the proposal was rejected both times.
Products that could the increase in prices are kerosene oil (Rs. 8.62) and lite-speed diesel (Rs. 5.38). Hi-octane is proposed to get an increase of Rs. 3.53 and regular petrol at Rs. 1.93 per liter. The proposed price increase of hi-speed diesel is Rs. 3.75 per liter. If government approves the new offer by OGRA, the new tariff will be:
| Petrol | Lite-Diesel | Hi-Speed Diesel | Kerosene Oil | HOBC | |
|---|---|---|---|---|---|
| Current Price(s) | 64.27 | 37.97 | 72.25 | 43.25 | 72.62 |
| Proposed Price(s) | 66.20 | 43.37 | 76.27 | 51.87 | 76.21 |
As mentioned above, OGRA also proposed price in May and June 2016, but both the PM and the Finance Minister rejected this idea. But this time, even the Treasury is expected to support the price hike since the federal reserves might come under the burden if prices are kept the same. The finance ministry, however, might not increase the prices of petrol and hi-speed diesel since these are used the most by a common citizen. The Ministry is aiming to reduce the burden since Eid-ul-Fitr is just around the corner.
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Keep in mind that even though the prices in international market fell by 50%, only a fraction of benefit was transferred to Pakistani motorists. In February 2016, the crude oil price was as low as $25 per barrel but the price decrease, as a result was nominal in Pakistan. A heavy portion of the total price charged from a common petroleum product user in Pakistan goes straight to the government in the form of taxes.
