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Thursday March 28, 2024

Govt decides to keep oil prices unchanged in August

By Israr Khan
July 31, 2016

ISLAMABAD: The government has decided to keep petroleum products’ prices unchanged for the third consecutive month in August 2016, apparently an effort to fizzle out masses’ mounting pressure on the government since the PanamaLeaks’ saga surfaced in April this year.

Prime Minister Nawaz Sharif has rejected the Oil and Gas Regulatory Authority (Ogra) recommendations for increasing petroleum products’ prices. During the previous few months, the prime minister had also rejected such proposals of Ogra  for increasing prices.  

Finance Minister Ishaq Dar on Saturday announced, “There will be no change in petroleum price in August as to provide maximum relief to the consumers, and the government will absorb the full impact of maintaining the prices at the current level.”

Interestingly, since the government came into power in 2013, it has cut the General Sales Tax (GST) and Petroleum Development Levy (PDL) on different petroleum products.

According to the government document, in March 2013, petrol price was Rs106.6 a litre with Rs14.7 of GST and 10 rupees PDL; diesel price was Rs113.56 a litre with Rs15.66 GST and eight rupees PDL; Kerosene price was Rs103.69 with Rs14.3 GST and PDL of six rupees a litre; HOBC price was 140.06 a liter that contained Rs19.32 GST and 14 rupees PDL, while light diesel oil (LDO) price was Rs98.26 with Rs13.55 GST and three rupees PLD.

But, now in August, petrol price is Rs64.27/litre with reduced GST of Rs9.34 and PDL of 8.19 rupees. Diesel price will be Rs72.52, GST Rs15.86 and PDL Rs7.8; Kerosene Rs43.25/litre, GST Rs2.06 and PDL Rs3.09; HOBC Rs72.68/litre, GST Rs10.56 and PDL Rs13.49, and LDO price will be Rs43.35 a litre with 3.4 rupees GST and 2.86 rupees PDL.

In 2013, the government levies were Rs24.7 (GST & PDL) on petrol that has now been reduced to 17.53 rupees. The combined rate of GST and PDL on HSD is the same today as was in 2013 and which is Rs23.66 a litre. On Kerosene, the levies were Rs20.3 a litre, which has been reduced to only 5.15 rupees a litra. 

Average sale of diesel across the country is around 0.6 million tons a month, petrol 0.4 million tons, kerosene less than 10,000 tons and HOBC lower than 6,000 tons. 

It is worth mentioning here that Ogra had recommended the government for August to increase the petrol prices by Rs2.12 a litre, which is widely used in cars and motorcycles owned by middle class commuters.

It also proposed to increase price of high-speed diesel (HSD), mostly used in mass transportation and agriculture, by Rs0.26 per litre and kerosene by 3.94 a litre for the month of August 2016.

The authority had also recommended reducing HOBC price by Rs0.60 a litre and LDO by Rs1.24 a litre which is an industrial fuel.