The Oil and Gas Regulatory Authority (Ogra) in its monthly review has proposed reducing petroleum prices by up to 9.7% from June 1, following a fall in global crude oil rates.
In a summary sent to the Finance and Petroleum Ministries on Wednesday, Ogra suggested passing on the reduction in international oil prices to the consumers from June.
Ogra wants High Octane Blending Component (HOBC) price cut by 9.7% (Rs13.24 per litre), petrol 4.6% (Rs4.71 per litre), kerosene oil 6.9% (Rs6.88 per litre), High Speed Diesel (HSD) 5.3% (Rs5.64 per litre), and Light Diesel Oil (LDO) rate reduced by 6% (5.84 per litre).
The government will notify the new prices on Thursday after approval of Prime Minister Yousaf Raza Gilani. A senior official of Petroleum Ministry said that consumers were unlikely to get the full benefit of the proposed price cut, as the finance ministry may insist on adjusting reduction in oil prices in petroleum levy to earn more revenue.
If the Ogra proposal is implemented, the price of petrol would come down to Rs98.65 per litre from existing Rs103.36 per litre, HOBC to Rs122.57 from Rs 135.81, HSD to Rs101.36 from Rs107, kerosene to Rs93.07 from Rs99.95, and LDO to Rs91.59 per litre from Rs97.43 per litre.
“Ogra has recommended passing on full reduction in oil prices to the consumers to provide relief to the end users,” the official said quoting the summary. He said the average decline in crude oil prices was 8%. “The average price of crude oil has dropped to $111 per barrel in ongoing month against $120 per barrel in April,” he said.
For the month of May, Ogra had also proposed cuts of Re1 per litre in the price of petrol, Re1.31 in HSD, Rs4.89 in HOBC, Rs2.13 in kerosene oil and Re1.64 per litre in LDO. But the federal government had turned down the proposal and kept the prices unchanged except that of light diesel oil (LDO), which was reduced by Rs1.31 per litre.
Currently, the petroleum levy for petrol is Rs8.86 per litre, HOBC Rs11.84 per litre, kerosene oil Rs5.15 per litre, LDO Rs3 per litre and HSD Rs4.20 per litre. During May, the government expects to collect around Rs24 billion on petroleum products including Rs6 billion in shape of petroleum levy and Rs18 billion as general sales tax (GST).
Published in The Express Tribune, May 31st, 2012.