The federal cabinet Friday rejected a proposal to increase the petroleum prices by Rs35 per litre, reported24NewsHd TV channel.

The cabinet has left the issue to the next government after the no-confidence motion to increase the POL prices.

The petroleum division has recommended a Rs35-per-litre hike in petroleum products.

The petroleum division recommendation has come in the backdrop of shortage of petroleum products and the division has sent a summary to the federal cabinet in this regard.

The petroleum division said that the Oil Marketing Companies were facing financial problems due to price differential claim, suggesting Rs27/litre hike in the price of petrol and Rs35/litre increase in high speed diesel. 

It warned if the government did not raise petrol prices, it would create extreme shortage of the fuel across the country. 

The petroleum division further said in case the government maintained the POL prices, then it would have to give Rs136 billion subsidy till June 30.

It also recommended that the GST and petroleum levy on the POL products be kept at zero level.

It bears mentioning that the federal government has decided to keep the POL price unchanged till June 30 on the order of prime minister.

The division recommended increase in POL prices keeping in view the tattered condition of the national kitty which does not afford such a hefty subsidy.