Rs15/litre cut in diesel, Rs9/litre in petrol prices likely

ISLAMABAD: Owing to reducing oil prices in the international market, the Oil and Gas Regulatory Authority (Ogra) has suggested the government to reduce the prices of petroleum products up to Rs15 a litre for January, 2019. The regulatory authority has suggested that prices of high speed diesel may be reduced by Rs15 per litre, petrol by Rs9.5 per litre, light diesel oil (LDO) by Rs2 per litre and kerosene by Re0.25 per litre for the next month. However, a senior official said that due to Pakistani rupee’s sizably depreciation against the dollar and government’s high revenue requirements, this recommendation may not be fully accepted by the government. Ogra has forwarded a summary to the Ministry of Energy, Petroleum Division that recommended revision in oil prices. If the government accepts this recommendation, then diesel prices would go down from existing Rs110.94 to Rs95.94 per litre, petrol from current Rs95.83 to 86.83/litre, LDO from Rs87.44 to Rs75.44per litre and kerosene from Rs83.5 to Rs83.25 per litre.

The government will take the final decision on the Ogra’s recommendation on Monday.

This reduction in prices of petroleum products have been calculated at 17 percent of general sales tax (GST). For current month (December), the Federal Board of Revenue (FBR) increased sales tax on diesel from 12 percent to 13 percent while for petrol it was increased from 4.5 percent to 8 percent. However, the sales tax on petrol is still low as compared to the standard rate of sales tax which is 17 percent. In the international market, the Brent oil price on Friday was recorded at $52.8 per barrel.