Oil prices may be increased by Rs five per litre

[Lahore_Real_Estate]

ISLAMABAD (October 26, 2010) : The government is expected to increase oil prices by nearly Rs 5 per litre from November 1, 2010, in line with the hike in global oil prices, "Global oil prices are posing rising impact in domestic oil prices by Rs 4-5 per litre which will be passed on to the consumers from November 1, 2010," sources said.

The international oil prices are showing rising trends as Brent (London) was traded at $82.25 a barrel and the basket of Opec (Organisation of Petroleum Exporting Countries) rose from $78.71 to $79.26 per barrel of oil on Monday.

Average Arab light crude oil price stood at $74.39 per barrel during September, which forced the government to announce nominal cut in prices of petroleum products in line with reduction in global prices, effective from October 1, 2010. However, the government had raised the prices of some products such as kerosene oil, JP-1, JP-4 and JP-8, due to increase in global prices.

In addition to Petroleum Levy (PL), the government is currently charging 17 percent general sales tax (GST) on petroleum products. "The surge in domestic oil prices would provide an opportunity for the government to collect more revenue on account of GST on petroleum products," official added. The government is currently charging Rs 9.73 per litre GST on petrol, Rs 11.56 per litre on HOBC, 9.56 per litre on kerosene oil and Rs 9.06 per litre on light diesel oil (LDO).

The Economic Co-ordination Committee (ECC) of the Cabinet has recently fixed margins of oil marketing companies (OMCs) and dealers in new pricing mechanism. "OMCs and dealers' margins may be slashed if ECC's decision is to be implemented from November 1, 2010," official said.