Petrol prices may be hiked by Rs28.44.

 The Oil and Gas Regulatory Authority (OGRA) has calculated a price increase of up to Rs28.44 per litre for gasoline products beginning August 1.

According to regulatory sources, the expected ex-depot price of petrol may rise by Rs6.53 per litre, high-speed diesel (HSD) by Rs28.44 per litre, kerosene oil (SKO) by Rs11.02 per litre, and light diesel oil (LDO) by Rs5.64 per litre based on the current rate of petroleum levy (PL).

The Finance Division will provide a summary on Saturday (today) requesting up to an 11% increase in fuel prices beginning August 1. As is customary, the prime minister will make the final judgement in this matter.

Similarly, if the government incorporates a Rs7 per litre petroleum dealer's profit in the pricing system, the price of petrol and HSD will rise even more. The Economic Coordination Committee (ECC) had authorised the higher margin of petroleum dealers the day before. The Petroleum Division informed traders that the government will impose the margin on August 1, 2022.

Petrol prices would rise from Rs230.24 to Rs236.77 per litre, HSD prices would rise from Rs236.00 to Rs264.44 per litre, SKO prices would rise from Rs196.45 to Rs207.47 per litre, and LDO prices would rise from Rs191.68 to Rs197.32 per litre.

It is worth noting that the increase in petroleum product prices corresponds to the growth in their international price.

Currently, the PL on fuel is Rs10 per litre, HSD, SKO, and LDO are Rs5 per litre, and sales tax is 0%.

In this context, the National Assembly has authorised an increase in the maximum PL limit from Rs30 per litre to Rs50 per litre in order to meet the Rs750 billion budgetary objective established in the Finance Bill 2022-23.

However, sources in the Petroleum Division believe that the government is unlikely to receive Rs750 billion from PL in the current fiscal year at the current rate, since it would imply a monthly collection of Rs14 billion.

Furthermore, if the 17% general sales tax (GST) is not levied on these items, a revenue loss of Rs45 billion per month is inevitable.