Shehbaz stated about petroleum prices during an Iftar meal for the coalition partners of the new government: “The pricing of petroleum items are updated every 15 days, as you are aware. They recommended a hike of between Rs21 and Rs50 per litre.”
He went on to claim that the people of the country would “hate” the new administration if they were subjected to such a “mountain of inflation.”
“How do the public learn about what the former administration did?” he questioned, noting that the price raise proposal had been rejected.
Meanwhile, the prime minister underlined in a statement that he had rejected the outline for raising petroleum product prices. “Prices will not change,” the message continued.
Ogra recommends a significant increase in petroleum price
On Thursday, Ogra proposed an extraordinary hike in petroleum product prices of up to Rs120 per litre (almost 83%) to cover full import costs, currency rate losses, and maximum tax rates.
Sources close to Ogra and the Petroleum Division acknowledged that the regulator had offered the government with two price hike alternatives, both of which were the highest-ever.
Both solutions, according to Ogra, were developed in accordance with the PTI government’s policy guideline, which was released on August 24, 2020. This necessitated calculations using current sales tax and petroleum levy rates at the time of the weekly review, as well as the maximum tax rates allowed by law.
According to the regulator’s working paper, based on the prevailing tax rates of zero, all items’ prices should rise in a Rs22-52 per litre spectrum to charge breakeven pricing without any subsidies.
The second price scenario used full tax rates, which included a 17 percent GST on all items and a Rs30 per litre petroleum fee on HSD and petrol, accompanied by Rs12 on kerosene and Rs10 on LDO – the maximum rates allowed by the Finance Bill.
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