Government reduces POL prices by Rs2 per litre from today

ISLAMABAD: Unveiling reduction in petrol and diesel prices by Rs2 per litre with effect from today (Dec 1), Federal Minister for Finance Asad Umar said that the shipments of POL imports were ordered after mid October on average prices of $77 per barrel so effort was made to avoid burdening consumers more.

The POL prices in international market have witnessed substantial decline in recent weeks and touched in the range of over $50 per barrel. However, the government announced to reduce the price of petrol by just Rs2 per litre, diesel Rs2 per litre, Rs3 kerosene and light diesel oil by Rs5 per litre with effect from December 1, 2018. The minister argued that if this decline continued in December then the consumers would get more relief next month.

While briefing reporters at the Information Service Academy at PID on Friday, Minister for Finance Asad Umar said that there was a need to explain the mechanism for fixing the POL prices and said that the government burdened consumers less at a time when it was witnessing highest fiscal deficit in absolute numbers in the history of the country.

He said the GST on diesel stood at 27.5 percent and on petrol 15 percent during the PML-N led regime till May 2018. The petroleum levy, he said, was ranging Rs8 and Rs10 per litres respectively. In October 2018 when the average price of POL products stood at $84 per barrel in October, the OGRA had recommended an increase in oil prices so the PTI led government brought down GST on diesel from 27.5 percent to 12.5 percent and on petrol from 12.5 percent to 4.5 percent to pass on lower burden to consumers. The petroleum levy on diesel was brought down from Rs8 to Rs6.25 per liter and on petrol from Rs10 to Rs6.15 per liter.

In recent weeks of November, the oil prices in international market witnessed decline but Pakistan ordered 4 shipments of petrol and 3 shipments of diesel after mid October with price range of $77 per barrel so the OGRA worked out an increase in prices in domestic market. Now the government has jacked up GST on petrol from 4.5 percent to 8 percent and diesel from 12 to 13 percent in order to fix the oil prices in domestic market, added the minister.