ISLAMABAD:
The federal government has announced that the price of gasoline will remain at Rs262 per litre, as recommended by the Oil and Gas Regulatory Authority (OGRA), but the price of diesel has increased by Rs7.5, to Rs260.5 per litre.
The announcement was made by Finance Minister Ishaq Dar in a tweet late Friday night, and the new rates will be in effect until July 15.
According to Dar, the huge increase in the price of oil on the global market necessitates a 7.5 rupee increase in the price of diesel per litre.
The ministry of finance did not elaborate on whether or not kerosene and light diesel oil prices had changed.
He explained that the decision to keep costs low was made after discussing the matter with the prime minister and the Office of Governmental Research and Analysis (OGRA).
Ogra had already forwarded to the finance ministry a summary of the prices of petroleum goods over the following two weeks. It was expected that the government would provide aid.
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The government stated on 15 June that petrol prices would be held steady for two weeks.
However, for the first two weeks of July, customers in Pakistan could count on a reduction in the price of gasoline of Rs6.48 a litre.
High-speed diesel (HSD), which is predominantly utilised in the transportation and agricultural sectors, was also predicted to see a price increase of Rs13.84 per litre, which would have had a significant impact on its consumers.
When the price of diesel goes up, the cost of shipping goods and producing crops both go up, leading to inflationary pressures.
However, motorists and motorcyclists were hoping for some comfort from the anticipated decrease in the price of petrol, an alternative to compressed natural gas (CNG).
Pakistan LNG Limited’s (PLL) inability to secure import contracts has slowed the delivery of LNG to CNG filling stations, notably in Punjab. Thus, motorists rely heavily on petrol.
The planned increases to the cost of petrol and diesel are reportedly based on the present rates of the petroleum levy and the general sales tax (GST). The petroleum charge for both gasoline and HSD has been set at Rs50 per litre.
As concerns about future interest rate hikes and weakening demand overshadowed support from an industry report showing a larger-than-expected drawdown in US crude stocks, oil prices declined earlier this week.
Benchmark China’s economic recovery has stalled after many months of softer-than-expected consumption and other indicators, and Brent crude prices have fallen by more than 15% this year as rising interest rates have dampened investor demand. At 13:48 GMT, the price of a barrel of Brent crude oil was down 43 cents, or 0.6%, to $71.83, while a barrel of US WTI crude oil fell 12 cents, or 0.2%, to $67.58.
Ole Hansen, head of commodity strategy at Saxo Bank, said, “For the time being, the market remains stuck with demand concerns weighing.” To paraphrase, “OPEC’s production cuts have helped prevent a deeper setback.”
Meanwhile, the Oil Companies Advisory Council (OCAC) has warned the government that imports for foreign suppliers’ account through the customs bonded storages pose a significant threat to the local refineries, which could have repercussions not only for the oil industry but for the economy as a whole.
