Petrol price to go down by Re0.25/litre

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has suggested to the government for reducing petroleum products’ prices up to 3.4 percent for December 2019.

The highest reduction it suggested of Rs2.9/litre or 3.4 percent for Light DieselOil (LDO) -- an industrial fuel. The regulator also suggested a cut of Rs2.4/litre or 1.9 percent for diesel, which is heavy transportation fuel. This cut would benefit the industrial sector, especially cement, steel, bricks and other exports-import products.

However, for common consumer, it suggested a reduction of only Re0.25 (or 0.2pc) in petrol price and Rs0.83 (or 0.9pc) cut in kerosene.

It is worth mentioning that the government is charging 17 percent general sales tax (GST) on all petroleum products. Apart from it, the government is also collecting petroleum levy (PL) on these products which is taken from consumers. Currently, the government is charging Rs18/liter petroleum levy on diesel, 15 rupees on petrol, 6 rupees on kerosene and three rupees on LDO.

In the previous government of the PML-N, the petroleum levy was charged in the range of three to 10 rupees a liter on these products, however, GST was higher than current rate.

Since the GST collected on these products are transferred to the provinces, so keeping in view its high revenue requirements, the federal government reduced GST while increased the petroleum levy to collect money for the federal kitty.

Official said that Ogra has sent the summary to the Ministry of Energy (Petroleum Division) and that would be then forwarded to the Finance Ministry for approval. The government would take decision on it on Saturday (today).

If the government accepts this recommendation, petrol price will come down from the existing Rs114.24 per litre to Rs113.99/ litre, diesel price will reduce to Rs125.01/litre from the current Rs127.41/litre.

Price of LDO, which is mainly used for industrial purposes, will reduce to Rs82.43/litre from Rs85.33/litre. Kerosene oil price will come down from current Rs97.18 to Rs96.35/litre. Kerosene is used for cooking purposes, especially in remote areas where LPG or pipeline gas is not available.

It is worth mentioning that the Brent Oil price in international market on November 29 was $62.9 per barrel, while on October 30, its price was $61.15 per barrel, on September 27 ($62.22/barrel), August 30 ($60.14) and on July 30, it was $64 per barrel. Earlier, in April and June, it was hovering near $72/barrel.

It is also worth mentioning that since July 2019, Pakistan is also receiving monthly oil supplies worth $275 million from Saudi Arabia on deferred payment. Under this arrangement,

Pakistan would get this oil facility to the tune of $9.9 billion over next three years.