Government hikes kerosene, LDO prices by up to Rs68

ISLAMABAD:

The Federal Government has hiked the prices of kerosene oil and light diesel oil (LDO), while deciding to keep petrol and high-speed diesel prices unchanged by maintaining the oil tax and providing a subsidy to absorb rising costs.

According to the Ministry of Energy (Petroleum Division), the price of petroleum oil has been increased by Rs 39.20 per litre, bringing the new rate to Rs 358.01 per litre.

In a separate adjustment, the government has also raised the price of light diesel by Rs67.51 per litre. The new price of light diesel has been fixed at Rs 302.52. per litre, compared to the previous price of Rs 235.01.

At the same time, the government has decided to maintain the existing petroleum tax on petrol and diesel. Tax on petrol remains at Rs 105.37. per liter while the tax on diesel remains at Rs 55.24.

Officials said that to keep petrol and diesel prices stable for consumers, the government will provide a subsidy of Rs 23 billion for a period of one week from March 14 to March 20. Under this scheme, the government will pay a subsidy of Rs 49.63 per liter on petrol and Rs 75.05 per liter on high speed diesel.

The subsidy will be paid to oil marketing companies in the form of price differential claims to compensate them for the difference between the market prices and the retail prices maintained by the government.

The Energy Ministry said the payments will be made through the Oil and Gas Regulatory Authority (OGRA), which will handle the disbursement of Rs23 billion. The authority will also implement a mechanism for verification and audit of invoices submitted by oil marketing companies before the claims are approved.

Meanwhile, the finance department has obtained the government’s approval for the creation of a “Prime Minister’s Provident Fund” to support such financial measures. The Economic Coordination Committee (ECC) has approved the transfer of Rs 27.10 billion. to the fund from which the grant payments will be made.