Businessmen hail new govt to reject OGRA advice to hike oil rates.

Karachi -- The Federation of Pakistan Chambers of Commerce and Industry's Businessmen Panel has appreciated the new government for rejecting the Oil and Gas Regulatory Authority's (OGRA) proposal to hike the prices of petroleum products, providing another hefty amount in subsidy from Apr 16 to 30 with a view to lower cost of production which is vital for sustainable growth in the country.

While issuing a press statement the BMP Chairman and FPCCI former president Mian Anjum Nisar said that the stable petroleum prices will not only provide the much-needed respite to the masses but also reduce the cost of production and give a boost to economic activity.

Mian Anjum said that it was the first test for the new government to provide relief to the industry despite high oil rates in the global market. Few days after the exit of the previous government, the Oil and Gas Regulatory Authority had suggested an unprecedented increase of up to Rs120 per litre (over 83 per cent) in the prices of petroleum products with effect from April 16 to recover full imported cost, exchange rate loss and maximum tax rates.

The regulator had presented two options to the government for price increase - the highest-ever in both cases - on the next fortnightly review due on Friday (today).

Ogra said both options had been worked out under the previous government's August 24, 2020, policy guideline. This 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.

The Ogra's working paper suggests that based on the existing tax rates - which are zero - the prices of all products should go up in a Rs22-52 per litre band to charge breakeven prices without any element of subsidy.

Under this option, the ex-depot price of high speed diesel (HSD) had been worked out at Rs195.67 per litre against the existing rate of Rs144.15, showing an increase of Rs51.52, or 35.7pc. The ex-depot price for petrol would have risen by Rs21.60 (14.2pc) to Rs171.46 per litre from Rs149.86.

The second price scenario was based on full tax rates, including 17pc GST on all products, and Rs30 per litre petroleum levy each on HSD and petrol, followed by Rs12 on kerosene and Rs10 on LDO - the maximum rates permissible under the Finance Bill.

It is fact that the government was facing problems due to the former government's mismanagement...

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