PM Shahbaz Sharif decides to keep oil prices unchanged in April

Prime Minister Shahbaz Sharif on Friday decided to keep oil prices unchanged effective from April 16, 2022.

Premier turned down the proposed increase in the price of diesel up to Rs 51 per liter effective from April 16, 2022.

Oil and Gas Regulatory Authority (Ogra) had proposed an increase in the price of diesel by Rs 51.32 per liter (35.7%), petrol by Rs 21.30 per liter (14.2%), kerosene oil by Rs 36.03 per liter (28.7%) and light diesel oil (LDO) Rs 38.89 per liter (39.9%).

However, the premier had turned down the proposed increase in oil prices that would put an additional burden of around Rs 30 billion on the government exchequer.

The government would have to pay this amount to oil firms on account of price differential claims (PDCs).

An amount of Rs 30 billion is already due on account of price differential claims due to keeping oil prices unchanged from April 1, 2022.

The government will be paying a price of Rs 60 billion to oil companies due to maintaining existing oil prices for the month of April 2022.

The government has maintained the existing price of diesel at Rs 144.15 per liter, petrol at Rs 149.86 per liter, kerosene oil at Rs 125.56 per liter, and light diesel oil (LDO) at Rs 118.31 per liter.

Oil prices maintained: Govt to spend Rs 33 billion

Former Prime Minister Imran Khan had announced a reduction of Rs10 per liter in the petroleum prices and that the new rates would remain in place till the FY23 budget.

However, this decision of keeping oil prices unchanged had no legal cover as the previous government had not approved it.

If the current government decides to keep oil prices unchanged from April 15-30, then it will have to give another Rs 30 billion in subsidies.

Officials said that the impact of rupee depreciation against the dollar had also resulted in an increase in oil prices by Rs 5.54 per liter or 3.03 percent.

The average rate of the dollar had jumped from Rs 182.15 to Rs 188.15.

High-speed diesel (HSD) is mainly used in the transport and agriculture sectors. At present, the sowing season was going on and therefore its consumption will be higher, putting an additional burden of subsidy or price differential claims on the government.