The Oil and Gas Regulatory Authority (Ogra) has proposed an increase in fuel prices from July 1– particularly the cost of petrol to be jacked up Rs6 per litre.
It has also sought an increase of Rs3 per litre in the price of high-speed diesel.
The regulatory authority has sent a summary to the petroleum division. However, the prime minister would make the final decision.
The finance ministry will announce the new prices on Wednesday (today).
If the petroleum levy is taken into account, the prices of petrol will increase by Rs37 per litre and high-speed diesel by Rs34 per litre.
Finance Minister Shaukat Tarin, at a post-budget news conference earlier this month, had said that to achieve the Rs610 billion petroleum levy target, the government would eventually have to increase the rate by Rs30 per litre.
However, he had hoped this would not be inflationary in view of expected lifting of US sanctions against Iran and its oil production and resultant lower international oil prices.
At the start of the current month, the government had decided to maintain the current fuel prices.
Also read: 63% of Pakistanis see rise in fuel, power prices
According to a statement issued by the finance ministry, Prime Minister Imran Khan had decided to maintain the prices of petroleum products as they were on May 17, 2021.
The government has not increased the prices of petroleum products since April 16, 2021 by adjusting sales tax and petroleum levy so that there is no corresponding increase in the prices of essential items and maximum relief is provided to the common man.
The government maintained the price of petrol at Rs108.56 per litre, HSD Rs110.76, kerosene oil Rs80 and LDO Rs77.65.
Ogra had proposed a hike of Rs4.36 per litre in the price of high speed diesel. The regulator had also suggested an increase of Rs0.5 per litre in prices of LDO and kerosene oil.
HSD is widely used in transport and agriculture sectors.
Earlier, the government had kept oil prices unchanged effective from May 17.
The government had borne a revenue loss of Rs2.77 billion for maintaining the same prices.
Ogra calculates ex-depot prices of petroleum products keeping in view the rate of petroleum levy and general sales tax.
The petroleum products are a major contributor to taxes as the government is currently charging double tax. It is charging a petroleum levy and general sales tax as well that result in higher prices in Pakistan.
However, Ogra had increased the price of LPG by Rs8 per kilo effective from June 1, 2021.
It issued notification to increase the price of LPG by Rs8 to Rs141 per kg, Rs1,667 per 11.8kg domestic cylinder, and Rs6,415 per commercial cylinder.