Prices raised significantly

The prices of petroleum products on Tuesday were increased in the range of Rs 2.78 to 6.29 per litre. According to a notification issued here, the government while ignoring the recommendations of the Oil and Gas Regulatory Authority has increased HOBC price by Rs 6.29 per litre, Premium by Rs 5.37 per litre, High Speed Diesel by Rs 4.64 per litre, Light Speed Diesel by Rs 3.43 per litre and kerosene oil by Rs 2.78 per litre.
Petrol by Rs 5.37 (6pc); HSD by Rs 4.64 (4.7pc); High Octane by Rs 6.29 (6pc); Kerosene Oil by Rs 2.78 (3pc) and LDO by Rs 3.43 (4pc)The Oil and Gas Regulatory Authority (Ogra), in its calculations that it sent to the Ministry of Petroleum and Natural Resources on Monday (January 30), recommended that oil prices for February should be kept unchanged.
Currently, petrol is being sold at Rs 89.54 per litre, kerosene oil at Rs 89.24 per litre, HOBC at Rs 111.91 per litre, LDO at Rs 86.78 per litre and HSD at Rs 98.82 per litre. After the current increase, HOBC would be sold at Rs 118.2 per litre, petrol at Rs 94.91 per litre, Light Speed Diesel at Rs 90.21 per litre, High Speed Diesel Oil at Rs 103.46 per litre and kerosene at Rs 92.02 per litre.
The Ogra had premised its recommendations for no change in oil prices on the fact that consumers were already paying a significant amount in the shape of petroleum levy. For January too, the government increased prices of petrol by Rs 1.65 per litre while of HOBC by Rs 5.13 per litre despite a decline in international crude prices and recommendations by Ogra to keep prices unchanged. However, prices of other petroleum products remained unchanged.
According to the notification, the government increased petrol price by Rs 5.37 per litre (6 per cent), High-Speed Diesel (HSD) by Rs 3.11 per litre (3 per cent), high octane by Rs 6.29 per litre (6 per cent), Kerosene Oil by Rs 2.78 per litre (3 per cent) and Light Diesel Oil (LDO) by Rs3.43 per litre (4 per cent).
In the international market, average crude oil price jumped by $4 to $114 per barrel in January compared to $110 in December 2011. The rupee has also depreciated by 1.2 per cent to Rs 90.3 per dollar compared to Rs 89.3 in December, making oil imports expensive.
According to Petroleum Ministry officials, the government collected an additional Rs 9 billion revenue on account of General Sales Tax (GST) and Petroleum Levy (PL) on petroleum products in the first six months of the current financial year (July-December) 2011-12 compared to the corresponding period of last year.
Should the government decided to keep oil prices unchanged, it would have to bear an impact of Rs 3 billion in the shape of lost sales tax and petroleum levy in February, sources said, adding that the amount could be absorbed as the government had collected an additional Rs 9 billion revenue in the first six months.
The government has already deregulated prices of many petroleum products including motor spirit (petrol), HOBC, LDO, jet fuels JP-1, JP-4 and JP-8 from June last year. This means refineries and oil marketing companies can announce ex-refinery and ex-depot prices on a monthly basis keeping in view the import prices. However, in a controlled mechanism, the government notifies prices after fixing inland freight equalisation margin and petroleum levy, which fall under its domain.