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Tuesday August 09, 2022

Latest petrol price: What has the finance ministry worked out?

Ogra has proposed the reduction in the price of diesel at Rs38.99 per litre and petrol at Rs20.07 per litre

July 14, 2022
A representative image.
A representative image.

ISLAMABAD: In line with the directives of Prime Minister Shahbaz Sharif to reduce the prices of petroleum products, the Finance Ministry has started deliberations after receiving a summary from the Oil and Gas Regulatory Authority (Ogra).

According to details, the ministry has worked out the reduction in Mogas (Petrol) price by Rs15 per litre and diesel by Rs33.99 per litre from July 16, 2022.

The new price of petrol has been proposed at Rs219.70 per litre after jacking up the petroleum levy (PL) byRs5 per litre to Rs15 per litre, from Rs10 per litre, and diesel Rs241.30 per litre after increasing the petroleum levy to Rs10 per litre from the existing Rs5 per litre.

Ogra summary

However, the regulator has proposed a reduction in the price of diesel at Rs38.99 per litre and petrol at Rs20.07 per litre without the increase of Rs5 per litre petroleum levy.

The prime minister wants to pass the reduction in prices of diesel and petrol on to consumers without the increase in the petroleum levy by Rs5 each, a senior official at the Finance Ministry told The News.

Petroleum levy

Meanwhile, the authorities are currently working on the amount of petroleum levy to be increased as per a deal with the International Monetary Fund (IMF).

According to sources, the Finance Ministry's top mandarins want the prime minister to allow it to increase the petroleum levy by Rs5 per litre each on petrol and diesel as the government is bound to increase the petroleum levy on both the POL products by Rs50 each gradually in the current budgetary year to achieve the revenue target of Rs850 billion.

The Finance Division is of the view that the massive reduction in crude oil prices in the international market has provided the space to increase the petroleum levy apart from reducing the POL prices from July 16, 2022.

It is to be noted that in the existing price of diesel, there is a petroleum levy of Rs5 per litre and in the price of petrol, the petroleum levy stands at Rs10 per litre and in the price of kerosene oil, PL stands at Rs5 per litre.

In the price of furnace oil which is used in IPPs for power generation, a massive relief has been worked at Rs12,981 per ton to Rs141,360 from Rs154,341 per ton. There is no petroleum levy on furnace oil.

When will cabinet decide?

The federal cabinet that meets on July 15 (tomorrow) will make the final decision about the decrease in the POL prices after getting the input of the cabinet members of allied parties.