Prime Minister Shehbaz Sharif has rejected the proposal of the Oil and Gas Regulatory Authority (OGRA) to increase the prices of petroleum products, Aaj News reported on Friday.

Aaj News citing government sources said that the price of petroleum products would not be changed, adding that the premier has maintained that the government will bear the burden of the hike in the prices of petroleum products itself instead of shifting it to the masses.

An official announcement regarding the decision will be made soon, it said.

Later, PM Shehbaz announced the government's decision at the iftar hosted for the parliamentary party. Leaders of the coalition parties were also in attendance.

“People are unaware of the previous government tricks, aimed at countering us [the former opposition]. We will collectively create awareness among the public [about this],” he said, "I have rejected the Oil and Gas Regulatory Authority’s summary to increase the petroleum products prices. People would have started cursing us if I had given a green signal to the proposal."

The premier alleged that the PTI was pursuing no holds barred tactic to harm democracy.

Shehbaz had further said that the new government would soon present the first half of the federal cabinet, adding that he would be in contact with coalition partners to resolve the issues.

“PM House will be Pakistan House, which will also have officers from all four provinces. This is your House and you are the prime minister,” he added.

Earlier, the OGRA had sent a proposal to the Finance Division to increase the price of petrol by Rs21.50 and diesel by Rs51.30.

The new government, led by Prime Minister Shehbaz Sharif, had been in internal discussions on whether to roll back fuel and power subsidies that have blown a hole in Pakistan's public finances amid a stuttering economy.

On February 28, former prime minister Imran Khan announced a reduction of Rs10 per litre in petrol and diesel prices. He had also announced that the price would remain the same till the announcement of the budget for 2022-23.

PM decision impact

The premier’s decision would put an additional burden of around Rs63 billion in the shape of subsidy and revenue shortfall, Business Recorder reported. The government would have to pay this amount to oil firms on account of price differential claims. The State Bank of Pakistan already revisited oil industry credit lines by allowing the oil industry to meet the import of petroleum products in the country.

An amount of Rs30 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 Rs63 billion to oil companies due to maintaining existing oil prices for the month of April 2022.

The government has maintained the existing price of HSD at Rs144.15 per litre, petrol at Rs149.86 per litre, kerosene oil at Rs125.56 per litre, and LDO at Rs118.31 per litre.

Officials said that the impact of rupee depreciation against the dollar had also resulted in an increase in oil prices by Rs5.54 per litre or 3.03 per cent. The average rate of the dollar had jumped from Rs182.15 to Rs188.15.

Energy experts said that there is no change in the ex-refinery price of petrol over fist half of April. The ex-refinery price of petrol was Rs161.91 per litre and remained the same in the next half of April. The ex-refinery price of HSD is increased from Rs176.53 per litre to Rs195.64 per litre or Rs19.11 per litre change in the second half of April.