On Tuesday, Finance Minister Ishaq Dar publicly announced a significant increase of Rs19 in petroleum product prices.
During a televised speech, Dar stated that there had been a rise in the international prices of high-speed diesel (HSD) and petrol in the last half of the month.
He explained that the government had monitored the Oil and Gas Regulatory Authority (Ogra) till late into the night. The delay in the price hike announcement was due to exploring possible avenues to minimize the increase.
He further revealed that the issue was discussed with Prime Minister Shehbaz Sharif earlier in the day.
Announcement of Increase in HSD and Petrol Prices
Dar pointed out the country’s international obligations to the International Monetary Fund (IMF) about the petroleum levy. “Had these commitments not existed, we could have announced a lesser increase. However, as everyone knows, we have a standby agreement,” he said, noting that the previous PTI government failed to uphold its promises with the lender.
“The smallest calculated increase must be implemented for the nation’s sake. Thus, the HSD price will rise by Rs19.90, setting the new price at Rs273.40. The petrol price will go up by Rs19.95, amounting to Rs272.95,” stated Dar.
He acknowledged that global price fluctuations are beyond the government’s control, adding, “We calculated the changes down to the last penny.” The price surge was based on Ogra’s final recommendation and approved by the prime minister.
Meanwhile, a 17.5% surge in the producer price of liquefied petroleum gas (LPG) was declared, along with a 13.5% increment in the consumer sale price for August.
New LPG Prices and Government’s Dilemma
An Ogra announcement revealed an increase of Rs281.5 per domestic cylinder of 11.8kg in LPG price. The revised producer price is Rs1,886.30 per 11.8kg cylinder, and the consumer price is Rs2 373.64 per cylinder.
A high-ranking official expressed that the government found it challenging to declare a major price surge before leaving office. Dar, the Ogra chairman, his team, and officials from the petroleum division were engrossed for hours in finding solutions to prevent or at least minimize the price hike.
