Local petroleum prices hiked for December

Karachi: The government has again increased the prices of petroleum products primarily on the back of adjustments in petroleum levy while also considering the fact that a decline is observed in the international oil prices.

According to Alfalah Securities Limited, the government has raised the price of High Speed Diesel by PkR 4.67/litre to PkR 98.94/litre, petrol prices by PkR 0.48/litre to PkR 87.89/litre, High Octane Blending Component (HOBC) price by PkR 0.06 to PkR 106.78/litre, Kerosene Oil price by PkR 3.48/litre to PkR 89.24/litre, Light Diesel Oil (LDO) by PkR 4.79/litre to PkR 86.78/litre while, the price of E-10 (country’s only bio fuel) price has been raised by PkR 0.48/litre to PkR 85.39/litre in the month of December.

The government had earlier deregulated the prices of petroleum products in June 2011 and had allowed refineries and Oil Marketing Companies (OMCs) to state their ex-refinery and ex-depot prices every month in order to examine the import parity price. The Oil and Gas Regulatory Authority (Ogra) had suggested the government to reduce the prices of petroleum products in December but the Petroleum Ministry has reacted oppositely imposing a further price raise.

The Petroleum ministry has also rejected a reduction in Internal Freight Equalization Margin (IFEM) while it increased petroleum levy on these product to meet budgetary constraints. The petroleum levy (PL) on petrol has been raised from PkR 9.52/litre to PkR 9.94/litre, PL on HOBC has been raised from PkR 6.13/litre to PkR 7.62/litre while on HSD from PkR 4.44/litre to PkR 5.09/litre. Alfalah Securities Limited expects a hike in petroleum prices would boost the prices of essential food items owing to an increase in transportation cost which would further exert inflationary pressures on the economy.

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