Petrol gets cheaper by Rs1.80 and diesel by Rs2.50 per litre

ISLAMABAD: The government decided on Saturday to pass only a partial price relief on to consumers of petrol and diesel, in line with the previous policy.

Despite a change at the helm of affairs, Prime Minister Shahid Khaqan Abbasi continued the policy of former premier Nawaz Sharif and approved only half of the price reduction proposed by the regulator for petrol and high-speed diesel.

The remaining is being absorbed by increasing the rates of sales tax on the two petroleum products.

Earlier, the government failed to notify new prices for August as there was no cabinet in place following the disqualification of premier Sharif by the Supreme Court in the Panama Papers case.



On July 31, in a terse statement, the Finance Division spokesman said considering the special circumstances, prices of petroleum products would be kept unchanged at the existing level until a decision was taken by the competent authority.

After the new prime minister and federal cabinet took charge, the government cut the prices of petrol and diesel, taking cue from movements in the international market.

Finance Minister Ishaq Dar announced on Saturday that the revised petroleum product prices would be effective from August 6 to the end of the month.

In a statement, Dar said it had been decided with approval of the prime minister to reduce the petrol price by Rs1.80 per litre and diesel price by Rs2.50 per litre. New prices will be Rs69.50 per litre for petrol and Rs77.40 per litre for diesel.



The minister said that the rates of kerosene oil and light diesel oil would not be increased, though a substantial hike had been recommended by the regulator.

As most of the consumers of these products were low-income people, he said, their prices would stay unchanged at the current level of Rs44 per litre.

The minister clarified that the price revision decision could not be taken on July 31 as no federal cabinet was in place at that time. Therefore, for the first five days of August, prices remained at the level prevalent in July 2017.

In a summary sent by the Oil and Gas Regulatory Authority (Ogra) to the ministries of petroleum and finance, the regulator had proposed that prices of petrol and diesel should be slashed from August.

According to the Ogra summary, the price of high-speed diesel, which is mostly used in transport vehicles and the agriculture sector, was proposed to be cut by Rs5.07 per litre (6.3 per cent). Apart from farmers and transporters, this price reduction could have a favourable effect on the rate of inflation in the country.

Petrol price was proposed to fall by Rs3.67 (5.1 per cent) to Rs67.63 per litre as compared to the current Rs71.30 per litre.

Kerosene oil, which is used for cooking purposes in remote areas where liquefied petroleum gas (LPG) is not easily available, was to be hiked by Rs13 per litre (29.5 per cent), standing at Rs57 against the existing price of Rs44.

The price of light diesel oil, consumed mainly by industrial units, was proposed to be increased by Rs10.01 per litre (22.8 per cent), to reach Rs54.01 as compared to the current Rs44 per litre. It has also been maintained at the existing level of Rs44 per litre.