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ISLAMABAD: Prime Minister Shehbaz Sharif on Friday announced to continue the subsidy for keeping petroleum products prices unchanged with effect from April 16, 2022.

The premier turned down the Oil and Gas Regulatory Authority (OGRA)’s recommended increase in the ex-depot price of high speed diesel (HSD) up to Rs51 per litre. The regulator had proposed an increase in the price of HSD by Rs51.32 per litre (35.7 percent increase), petrol by Rs21.30 per litre (14.2 percent increase), kerosene oil by Rs36.03 per litre (28.7 percent increase), and light diesel oil (LDO) Rs38.89 per litre (39.9 percent increase).

However, the premier had turned down the proposed increase in oil prices that would put an additional burden of around Rs63 billion in the shape of subsidy and revenue shortfall.

The government would have to pay this amount to oil firms on account of price differential claims (PDCs). The State Bank of Pakistan already had revisited oil industry credit lines by allowing oil industry to meet the import petroleum products in the country.

An amount of Rs30 billion is already due on account of price differential claims due to keeping oil prices unchanged from April 1, 2022.

The government will be paying a price of Rs63 billion to oil companies due to maintaining existing oil prices for the month of April 2022.

The government has maintained the existing price of HSD at Rs144.15 per litre, petrol at Rs149.86 per litre, kerosene oil at Rs125.56 per litre, and LDO at Rs118.31 per litre.

Officials said that the impact of rupee depreciation against the dollar had also resulted in an increase in oil prices by Rs5.54 per litre or 3.03 percent. The average rate of the dollar had jumped from Rs182.15 to Rs188.15.

Energy experts said that there is no change in ex-refinery price of petrol over fist half of April. The ex-refinery price of petrol was Rs161.91 per litre and remained same in the next half of April. The ex-refinery price of HSD is increased from Rs176.53 per litre to Rs195.64 per litre or Rs19.11 per litre change in second half of April.

Copyright Business Recorder, 2022

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