Govt likely to maintain fuel prices at current level for first half of January

ISLAMABAD: The government will sit and wait for at least the first half of January before announcing any change in the prices of petrol and high-speed diesel (HSD). According to sources in the oil industry, so far very nominal reduction in petrol and HSD price has been calculated on the basis of existing rate of petroleum levy (PL), General Sales Tax (GST), Inland Freight Equalization Margin (IFEM). And, the federal government is likely to announce no change in petrol and diesel prices for the first half of January 2023.

“Based at existing rates of PL, GST and IFEM margin, 40 to 45 pasia reduction in petrol and 90 to 93 paisa in HSD price has been calculated with effect from January 1, 2023,” said sources, adding that the price of petrol and diesel (HSD) will go up if the government increases PL to meet the condition of IMF.

At present, the expected claim exchange loss of Pakistan State Oil (PSO) is Rs 3.50 per litre on HSD and Rs 5.50 per litre on petrol.

However, as per sources, the price of kerosene oil (SKO) is likely to increase by Rs 6.73 per litre and Rs 4.08 per litre raise in light diesel oil (LDO) while if the government decides to raise the price, the price of SKO will witness a hike from Rs 171.83 to Rs 178.50 per litre and price of LDO will also be increased from Rs 169 to Rs 173 per litre.

The exchange rate of rupee against US dollar increased by Rs 1.11 from Rs 224.51 to Rs 225.62, the sources added. Meanwhile, the Oil and Gas Regulatory Authority (OGRA) has issued a notification of decrease in Liquefied Petroleum Gas (LPG) price by Rs 12 per kilogram for the next month of January 2023. And, with the effect of OGRA’s notification of cut in LPG price, the price of domestic cylinder has been   reduced by Rs 137 and commercial cylinder by Rs 527 for January 2023.

According to OGRA notification, LPG will be available in open market at Rs 204 per kilogram and domestic cylinder to be available at Rs 2411 while commercial cylinder at Rs 9278 during January 2023.  

Irfan Khokhar, Chairman LPG Industries Association claimed that they can provide LPG at a cheaper rate to countrymen than to sui gas rate if the government facilitates the LPG industry as it is currently facilitating the Liquefied Natural Gas (LNG) industry. 

He further demanded from the government to allow the LPG plant of Jamshoro Joint Venture Limited (JJVL) to start LPG production to provide cheaper gas to the citizens of the country during the ongoing cold weather season and to avoid further losses to the national exchequer. He said the government should devise LPG import policy to bridge the natural gas shortfall. The government must stop factories of Gujranwala which are producing substandard LPG cylinders and take strict action against all those which are involved in the sale of substandard LPG cylinders in the country, said Irfan Khokhar, Chairman LPG Industries Association.   

It is pertinent to mention that previously the LPG was available at Rs 216 per kilogram and domestic cylinder was available at Rs 2548 while commercial cylinder at Rs 9804 in December 2022.