Prime Minister Shehbaz Sharif rejected a proposal from the Oil and Gas Regulatory Authority (Ogra) to raise prices for petroleum products on Friday.
At an Iftar dinner for the coalition partners of the new government, Shevaz said: “As you know, the price of petroleum products is revised every 15 days. [proposed] Rs21 and Rs50 increase per liter”
He went on to say that if such a “mountain of inflation” hit them, the people of the country would “curse” the new government.
“What do the people know about what the previous government did?” He added that the price increase offer was rejected.
Meanwhile, a statement issued by the prime minister reiterated that the prime minister refused to summarize the price hikes for petroleum products. “Prices will remain the same,” the statement added.
Ogra proposes massive oil price hike
On Thursday, Ogra proposed raising the price of petroleum products up to Rs120 per liter (over 83%) to recover full import costs, exchange rate losses and maximum tax rates.
Sources with high positions in Ogra and the Petroleum Division confirmed that regulators have offered the government two options for price increases. In both cases, it was an all-time high.
Ogra said both options were addressed following the PTI government’s August 24, 2020 policy guidance. This required calculations based on the current sales and petroleum tax rates at the time they were reviewed every two weeks, plus the full tax rate permitted by law.
working documents of regulatory bodies; SerbHe proposed that the price of all products should rise in the range of Rs22-52 per liter in order to impose a break-even price without a subsidy element based on the existing tax rate, which was zero.
The second pricing scenario was based on 17pc GST for all products and full tax rates including HSD and Rs30 per liter for gasoline each, Rs12 for kerosene and Rs10 for LDO, which is the maximum tax rate allowed under the fiscal legislation.