Major cut: Petrol becomes cheaper by Rs8.48 a litre

CNG price in Punjab cut by Rs6-7 per kg

ISLAMABAD:

Petrol consumers will pay 12% less from today (March 1) as the government decided on Monday to pass on the benefit of lower global oil prices to them. Meanwhile, the price of the compressed natural gas (CNG) has been slashed by at least Rs6 per kilogram across Punjab.

The Oil & Gas Regulatory Authority (Ogra) had proposed to the finance ministry that petrol prices be reduced by Rs8.48 per litre, bringing it down from Rs71.25 to Rs62.77 per litre. Prime Minister Nawaz Sharif approved the proposal.

High-speed diesel price has been cut by Rs4.67 per litre from Rs75.79 to Rs71.12. Light diesel oil price has been cut by Rs1.97 per litre from Rs39.94 to Rs37.97. High-octane blended component price has been slashed by Rs2.98 per litre from Rs75.66 to Rs72.68.

Ogra had recommended that kerosene oil price be reduced by Rs1.66 per litre from Rs43.25 to Rs44.91.
The premier, however, rejected the proposal. The government had already given relief to consumers by rejecting the increase in its prices.

The regulator had recommended slashing oil prices by 17% for the month of February due to a sharp decline in the global oil prices following the lifting of sanctions on Tehran by the US and European powers. Ogra had proposed a reduction of Rs7 to Rs11 per litre.

But the government cut prices by Rs5 per litre, and the remaining impact was absorbed in changing the mechanism of the general sales tax.

Earlier, the government had been charging 17% GST on petroleum prices, and slashing oil prices led to a decline in revenue collection.

Officials said the government did not fear it would lose revenue due to reduction in oil prices as it had fixed the rate of GST on petroleum products for February. This was the reason the government passed on full relief to the consumers for March. Earlier, the government had been collecting Rs20 billion in revenue on account of GST and Rs10 billion of petroleum levy on petroleum products.

However, the change in mechanism of charging fixed GST on petroleum products enabled the government to collect Rs30 billion against Rs20 billion.

CNG prices

Keeping in view the low import price of LNG, the government has slashed CNG prices in Punjab by at least Rs6 per kilogramme, said CNG sector leader Ghiyas Paracha.

CNG stations across the province are being run on imported LNG due to shortage of gas supply.

Paracha sees the reduction in prices as a major step towards reviving the dying CNG industry. He said CNG prices would be slashed by Rs6 to Rs7 per kilogramme on filling stations being run on RLNG, which would reduce the oil import bill and pollution while providing jobs to millions. “Pakistan’s CNG industry will soon reclaim its lost title of ‘world’s largest CNG industry’ due to the support and initiatives of the government.”

He said CNG in Punjab would be 30% cheaper than petrol, motivating transporters to reduce bus fares to provide relief to commuters.

Published in The Express Tribune, March 1^st, 2016.