The Oil and Gas Regulatory Authority (Ogra) has suggested that prices of petroleum products should be increased by up to 3.2% for January 2020.
The summary sent to the government by OGRA recommended the highest increase of Rs3.10 per litre or 3.2% in the price of kerosene oil, and a hike of Rs2.61 per litre or 2.3% in the price of petrol.
An OGRA official stated that the authority has sent the summary to the Ministry of Energy (Petroleum Division), which will forward it to the finance ministry for approval. The government will take decision on the summary on Tuesday.
The regulator also suggested an increase of Rs2.25 per litre or 1.8% in the price of high-speed diesel, which is mainly used in transport and agriculture sectors.
Ogra also proposed an increase of Rs2.08 per litre or 2.5% in the price of light diesel oil (LDO) for the month of January.
If the government accepts recommendations of the regulator, the petrol price will go up from the existing Rs113.99 to Rs116.6 per litre and diesel price will rise from the current Rs125.01 to Rs127.26 per litre.
The price of LDO, which is mainly used in industries, will jump to Rs84.51 per litre from Rs82.43 whereas kerosene oil price will rise from the current Rs96.35 to Rs99.45 per litre.
Moreover, the government is currently charging 17% general sales tax (GST) on all petroleum products. Apart from that, petroleum levy is being collected on these products from the consumers.
The government is charging a petroleum levy of Rs18 per litre on diesel, Rs15 per litre on petrol, Rs6 per litre on kerosene and Rs3 per litre on LDO.
It is pertinent to mention that Pakistan is a net importer of petroleum products and almost 85% of the need is imported, therefore, the depreciation of the rupee against the dollar has played a key role in pushing up oil prices, resulting in higher inflation.
Prices of petroleum products had dropped in December when the government slashed them by up to 3.4%.