Govt slashes POL prices

ISLAMABAD: Finance Minister Muhammad Ishaq Dar on Friday announced a cut in the prices of petroleum products ranging between Rs1.02 and Rs4.92 with effect from August 1.
Following Prime Minister Muhammad Nawaz Sharif’s approval, the government passed partial benefit on to consumers after a reduction in the POL prices in the international market.
According to a notification issued by the FBR on Friday night, in order to offset full benefit as recommended by the Ministry of Petroleum, the government jacked up the GST rate on High Speed Diesel (HSD) to 36.5 percent ad valorem, petrol at 20 percent, kerosene at 20 percent, HOBC at 17 percent and Light Diesel Oil at 20 percent with effect from midnight August 1.
The government passed only 50 percent benefit on to consumers in a bid to increase tax revenues and narrow down the budget deficit.According to top bosses in the Finance Ministry, the government kept the POL prices unchanged last month despite a surge in prices in the international market, burdening the state kitty with Rs2.5 billion in just one month.
The government collects more than 25 percent revenue through the POL products.According to economic gurus, the partial decrease in the prices of POL products will enable the government to bridge 50 percent losses caused by the last month’s subsidy.
The price of petrol was reduced by Rs1.03 per litre bringing it down from Rs77.79 per litre to Rs76.76 per litre with effect from August 1.The ministry had recommended Rs2.69 per litre reduction in the price of petrol.
The price of High Speed Diesel (HSD) was brought down by Rs2.06 per litre, scaling it down from Rs87.11 per litre to Rs85.05 per litre. The ministry had recommended a reduction of Rs3.51 per litre.
The price of kerosene was brought down from Rs64.94 per litre to Rs60.11 per litre, slashing down the price by Rs4.83 per litre.The price of light diesel oil (LDO) was reduced by Rs4.92 per litre bringing it down to Rs56.59 per litre from Rs61.51 per litre.