Islamabad, Apr 15: Days after Imran Khan-led PTI government’s exit, the Oil and Gas Regulatory Authority (Ogra) has suggested an unprecedented hike of up to PKR 120 per litre in the prices of petroleum products with effect from Saturday.
The over 83 per cent rise was suggested on Thursday by Ogra to recover full imported cost, exchange rate loss and maximum tax rates, as inflation turned out to be one of the key reasons for Imran’s ouster. Highly placed sources in Ogra and the Petroleum Division confirmed to the Dawn newspaper that the regulator had presented two options to the government for price increase ? the highest-ever in both cases ? on the next fortnightly review that was due on April 15. Prime Minister Shehbaz Sharif must decide whether or not to lift a four-month price freeze (until June 30) announced by his predecessor, Imran Khan, on February 28. Informed sources, however, told Dawn that the price freeze would continue for the time being. Ogra said both options had been worked out under the PTI government’s August 24, 2020, policy guideline. This required calculations on the basis of existing sales tax and petroleum levy rates at the time of fortnightly review as well as full tax rates permissible under the law.
The Ogra’s working paper, seen by Dawn, suggests that based on the existing tax rates ? which are zero ? the prices of all products should go up in a Rs 22-52 per litre band to charge breakeven prices without any element of subsidy. The second price scenario is based on full tax rates, including 17 per cent GST on all products, and Rs 30 per litre petroleum levy each on HSD and petrol, followed by Rs12 on kerosene and Rs10 on LDO ? the maximum rates permissible under the Finance Bill. The PTI government had approved slightly over Rs31 billion for payment to oil marketing companies as price differential claims for March, but an amount of Rs 34 billion for the first fortnight of April has neither been approved nor allocated in the budget so far. (UNI)
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