Ringing in the New Year with petrol bomb

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VIAZafar Bhutta
SOURCEThe Express Tribune
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ISLAMABAD:  The federal government has given New Year gift to people by simultaneously increasing the prices of petroleum products and liquefied petroleum gas (LPG). petrol

Moreover, the National Electric Power Regulatory Authority (Nepra) also allowed K-Electric a hefty tariff increase of around Rs4.8 per unit on account of quarterly tariff adjustment.

The new prices would come into effect from January 1.

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The government on Tuesday increased the price of Petrol by Rs2.61 per litre and High Speed Diesel(HSD) by Rs2.25 per litre High Speed Diesel (HSD) for the month of January, 2020.

Also Read: Pakistan Petroleum Limited finds fresh oil and gas deposits

As per the notification issued by the government on Tuesday night, the entire increase in the petroleum products has been passed on to consumers.

As per the notified prices, an increase of up to 3.2 per cent in the prices of various petroleum products has been allowed for the first month of New Year.

As per the notification, kerosene price has been increased by Rs3.10 or 3.2 per cent, and light diesel oil (LDO) by Rs2.08 per litre or 2.5 per cent.

Similarly, high speed diesel (HSD) has been hiked by Rs2.25 per litre or 1.8 per cent and petrol Rs2.61 per litre or 2.3 per cent.

After the increase, petrol price will go up from the existing Rs113.99 per litre to Rs116.60 per litre, HSD price will jump to Rs127.61 per litre from the existing Rs125.01 per litre.

The rate of LDO will go up to Rs84.51 per litre from Rs82.43 per litre. Similarly, kerosene price will go up from the current Rs96.35 to Rs99.45 per litre.

In a summary moved to the Petroleum Division, Oil and Gas Regulatory Authority (Ogra) had proposed an increase of Rs2.61 per litre in the price of petrol and Rs2.25 per litre, high speed diesel (HSD), kerosene by Rs3.10 or 3.2 per cent and Light Diesel Oil (LDO) by Rs2.08.

HSD is used in heavy transportation fuel, LDO in industries, petrol is being used in public transportation while kerosene is used for cooking purposes, especially in remote areas where LPG or pipeline gas is not available.

From the month of January, the government will be charging 17 per cent general sales tax (GST) on all petroleum products.

Apart from this, the government is also collecting petroleum levy (PL) on the products which is taken from the consumers.

Currently, the government is charging Rs18 per liter petroleum levy on HSD, Rs15 on petrol, Rs6 on kerosene and Rs3 on LDO.

Meanwhile, the government has increased the price of local liquefied petroleum gas (LPG) by Rs277.79 to Rs1,791.48 per 11.8/kg cylinder for January 2020.

Ogra notified the new prices, under which LPG price has been increased by 23.54/kg to Rs151.82/kg.

For December 2019, Ogra had notified LPG price at Rs1,513.69/cylinder or Rs128.27/kg.

The producers’ price of LPG (propane 40 per cent and butane 60 per cent) has been determined at Rs90,092.65/ton compared with Rs69,971.31/ton in December 2019.

This price included excise duty of Rs85/ton, while excluding the petroleum levy.

Under this head, the producer price of Rs1063.09/11.8kg cylinder has been worked out.

Meanwhile, Nepra has allowed K-Electric a hefty tariff increase of around Rs4.8 per unit on account of quarterly tariff adjustment and the company will receive Rs106 billion extra under the price revision.

In a statement issued on Tuesday, Nepra said the authority, based on the information, data and record provided by K-Electric, approved the quarterly adjustment claims of the power utility for the period Jul-Sept 2016 to Jan-Mar 2019.

Revenue shortfall rises to Rs287b

The revised tariff was worked out at Rs17.69 per kilowatt-hour (kWh) and its impact would be felt in electricity bills for coming months. “The electricity price has been increased from Rs12.81 to Rs17.69 per unit, a rise of around Rs4.8 per unit,” a Nepra official said.

A major reason for the higher power tariff was the consumption of re-gasified liquefied natural gas (RLNG) in power production, which left an additional impact of Rs24 billion.

(This news/article originally appeared in The Express Tribune on January 1st, 2020)

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