Fuel prices may be slashed by up to Rs6.44 per litre, and CNG prices by Rs4.60 per kilogramme, following a reduction in global oil prices.
The new prices will be effective between July 1 and 15, following a new mechanism of fortnightly review of oil prices. In a summary moved to petroleum and finance ministries on Thursday, the Oil and Gas Regulatory Authority (Ogra) proposed that the federal government reduce petroleum prices by up to Rs6.44 per litre.
“The CNG price is linked to 60% parity of petrol, and so the price of CNG will decline by Rs4.60 per kg following the cut in prices of petrol,” a senior government official said.
In the summary, Ogra suggested passing on the full reduction in international oil prices to consumers since the finance ministry has no space to adjust the cut in oil prices in Petroleum Levy. The rates of the levy on petroleum products are already at the maximum level fixed by parliament. The levy on petrol stands at Rs10, high speed diesel (HSD) Rs8, HOBC Rs14 and kerosene oil Rs6 per litre.
Ogra has suggested slashing the price of HOBC by Rs6.44 to Rs106.88 per litre, petrol by Rs5.02 to Rs84.49 per litre, kerosene oil by Rs2.54 to Rs86.25, HSD by Rs2.48 to Rs97.21 and light diesel oil by Rs2.86 to Rs83.71.
The prices of jet fuels JP-1, JP-4 and JP-8 have been proposed to be cut by Rs2.48, Rs3.46 and Rs2.48 to Rs75.95, Rs66.24 and Rs75.63 respectively.
The government will notify the new prices on Saturday after approval of Prime Minister Raja Pervez Ashraf.
Meanwhile, the government is considering a proposal to reduce gas prices for domestic consumers starting July 1. Gas prices for commercial, power, fertiliser and industrial sectors, would not be reduced.
Published in The Express Tribune, June 29th, 2012.
More in BusinessCabinet committee: Pakistan Steel revival plan wins green light