Ogra summary rejected: PM Shehbaz Sharif says no hike in POL prices

ISLAMABAD: Prime Minister Shehbaz Sharif Friday rejected a summary, moved by the Oil and Gas Regulatory Authority (OGRA), for increasing the POL [petrol, oil and lubricants] prices in the wake of the international market situation, saying the prices would remain unchanged as people could not afford it due to their financial hardships.

Speaking at an Iftar-dinner he hosted for the heads of parties, senior leaders and parliamentarians here, he said he had received a summary for increase in petrol price by Rs21.50 per litre and diesel by Rs51.50 per litre; however, he rejected the same in the public interest. He said people of the country would curse the new government if such a 'mountain of inflation' was unleashed on them. "Had I accepted the summary, the people should have started cursing us in three days," he said.

Shehbaz said the government would bear the burden of increase in prices of petroleum products itself instead of shifting it to masses. “The last government also left many problems because perhaps they knew that the new government would come and face the consequences,” he said.

PM Shehbaz said the coalition partners were moving forward with consultation and the formation of the federal cabinet would be completed soon. He said the federal cabinet would be formed in two phases. “The cabinet members in the first phase will be announced soon, and the second phase will be completed next week,” he added.

Prominent amongst those from coalition partners attending the Iftar-dinner included Bilawal Bhutto Zardari, Maulana Asad Mahmood, Khalid Maqbool Siddiqui, Shazain Bugti and others. Shehbaz said the Prime Minister’s Office would now be working as the Pakistan House, where officers from across the country would serve. “I will try to come up to your expectations and will remain in touch with you and will try to solve problems of your constituencies,” he said.

Shehbaz regretted that the previous government did not give relief in prices of flour during Ramazan. He regretted that the opposition wanted to cross all limits to pack up the democratic order in the country, but it would not succeed in its designs.

Official sources said Ogra had suggested an unprecedented increase of up to Rs120 per litre (over 83 per cent) in the prices of petroleum products to recover full imported cost, exchange rate loss and maximum tax rates.

Sources said the Petroleum Division and Ogra had presented two options to the government for price increase — the highest-ever in both cases. Both the options were worked out under the PTI government’s August 24, 2020, policy guideline. This had required calculations on the basis of existing sales tax and petroleum levy rates at the time of fortnightly review as well as full tax rates permissible under the law.

Meanwhile, the federal government announced a ban on export of sugar, saying it would help lessen sugar prices and provide relief to people. The decision was made in a session, chaired by Prime Minister Shehbaz Sharif. Sources said the ban would remain in place for the rest of the year.

Israr Khan adds: The government has decided to keep the petroleum products’ prices unchanged at home from April 16 through April 30, 2022, to provide relief to the masses.

Prime Minister Shehbaz Sharif rejected the Oil and Gas Regulatory Authority's (OGRA) recommendation on increasing the petroleum products' prices and instead ordered to keep it unchanged in the next fortnight. “OGRA has proposed a significant increase in the prices of petroleum products. However, the prime minister has rejected the recommendations of OGRA and directed maintaining the petroleum products’ prices unchanged to provide relief to the common man,” a statement of the Finance Ministry said on Friday night.

For keeping the prices unchanged, Islamabad would spend Rs2.2 billion each day to keep Pakistan away from the impacts of rising crude prices in the international market. By not increasing the petroleum products, Rs33 billion would be spent from the government’s kitty during these 15 days.

On Friday, the Global Benchmark Brent price touched $111.23/barrel. Earlier, on March 7, it had hit US$139.13 a barrel. The all-time of $147.50 was last seen in July 2008. The current ex-depot price of petrol is Rs149.86 per litre, high-speed diesel Rs144.15 per litre, kerosene Rs125.56 per litre, and light diesel oil (LDO)118.31 per litre.

It was decided that these prices would remain unchanged. Consumers in the remote areas use kerosene for cooking purposes where gas is unavailable. LDO is being consumed by flour mills and a couple of power plants.

It is to be noted that the Oil and Gas Regulatory Authority (OGRA) a few days ago had sent a summary (having two proposals) to the Finance Ministry for increasing the petroleum products prices.

One suggested the government should increase the price of petrol by Rs21.50 and diesel by Rs51.30/liter (based on existing/current petroleum levy and GST). The other one asked to increase the petrol price by Rs83.50/litre and diesel by Rs119.88/litre (based on the federal government’s advised petroleum levy of Rs30 and 17 percent GST).