Pakistan

Petrol price cut by Rs1.70 per litre

Govt deregulates oil prices; Ogra notifies cuts in prices of three products.

Express June 01, 2011

ISLAMABAD:

The government’s sudden move to deregulate prices of petroleum products on Tuesday forced Oil and Gas Regulatory Authority (Ogra) to announce a cut in prices of only three petroleum products effective Wednesday (today).

Ogra notified a reduction in price of petrol by Rs1.70 per litre, kerosene oil by Rs5.05 per litre and high speed diesel (HSD) by Rs3.20 per litre.

The new prices of petrol, kerosene oil and HSD would be Rs86.71, Rs84.65 and Rs94.11 per litre, respectively.

The authority will notify the new prices of High Octane Blending Component (HOBC), JP-1, JP-4 and JP-8 fuel today (Wednesday), giving oil retailers the opportunity to profit by charging consumers the existing rate of products.

The government has deregulated prices of all petroleum products, except kerosene oil, effective from June 1, 2011, said Ogra spokesperson Syed Jawad Naseem while addressing a press conference here.

Naseem said that ex-refinery price of petrol has also been deregulated following the decision of Economic Coordination Committee (ECC) of the cabinet taken on October 6,2010.

“After this, the government will not give any money to Pak Arab Refinery Limited on account of price differential claims,” he said, adding that Pakistan State Oil’s cost of petrol supply would be benchmark for other OMCs.

“Ogra will monitor the prices of petroleum products to ensure that Oil Marketing Companies (OMCs) do not overcharge consumers.

“Ogra Ordinance has been sent to the Cabinet Division,” the official said, adding that after the amendment in the ordinance, Ogra will be empowered to impose certain penalties on OMCs if they are found overpricing.

However, the government has not implemented the ECC’s decision to deregulate inland freight equalization margin.

Ogra on Monday had moved a summary to petroleum and finance ministries with recommendation to reduce prices of petroleum products. The authority suggested a cut of 74 paisa per litre in the price of petrol, 67 paisa per litre cut in HOBC price, Rs5.05 per litre cut in price of kerosene oil and a cut of Rs3.20 per litre for high speed diesel.

The authority also suggested cuts of Rs5.19, Rs5.87, Rs5.86 and Rs4.53 in per litre prices of Light Diesel Oil, JP-1, JP-8 and JP-4 fuel respectively.

Published in The Express Tribune, June 1^st, 2011.

COMMENTS (8)

raheel | 12 years ago | Reply GoP deregulates MS, HOBC, LDO and JP1/4 prices: As per OGRA notification, ex-refinery/ex-depot prices of MS, HOBC, LDO and jet fuels have been deregulated, effective June 1, 2011, and will now be notified by refineries and OMCs. However, it envisages only a partial implementation of the original deregulation plan as OGRA has notified product wise IFEM rates for Jun-11. The move shall have no major earnings impact on OMCs and refineries due to no major change in the “margin pool” as end product prices continue to remain capped at levels determined through the old pricing formula. However, price deregulation could eventually lead to higher ex refinery prices for MS, which is currently being priced lower than import parity due to unitary RON penalty.

raheel | 12 years ago | Reply Neutral on the OMC front: OMCs will now be responsible for notifying ex-depot price, however with IFEM still in place, OGRA has just passed the buck to OMCs for notifying ex-depot prices which essentially will be the same had OGRA continued to regulate product prices. While there appears to be some confusion regarding news report of ATRL's surplus in IFEM being reduced to zero, we reiterate that there will be neutral impact of this.

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RAHEEL | 12 years ago | Reply Positive on the refinery front: Mogas conversion has been increased to ~91RON from the previously used 87RON. As a result of this adjustment ex-refinery price of Mogas for June-11 has increased to PKR 64.06/liter compared to PKR 61.41/liter calculated at 87RON. The resultant revision in Mogas RON rating will yield an EPS upside of PKR 9.4 for ATRL, PKR 0.54 for Byco, PKR 3.87 for NRL, and PKR 9.12 for PRL on an annualized basis. Higher benchmark pricing indicates that refiners may now have to upgrade their Mogas rating to 91RON, barring which OGRA may be forced to revisit the increase in benchmark pricing. Neutral on the OMC front: OMCs will now be responsible for notifying ex-depot price, however with IFEM still in place, OGRA has just passed the buck to OMCs for notifying ex-depot prices which essentially will be the same had OGRA continued to regulate product prices. While there appears to be some confusion regarding news report of ATRL's surplus in IFEM being reduced to zero, we reiterate that there will be neutral impact of this.

Omar Haroon | 12 years ago | Reply @bulbul: Or maybe if you wait and save enough you can get some MnMs instead :)

bulbul | 12 years ago | Reply I will hopefully be able to buy a "toffee" after getting my tank full today =)

SK | 12 years ago | Reply wow so much saving!!!!!!! now consumers will become millionaires

Noor | 12 years ago | Reply I will beleive all claims by the govt like, we're fighting our own war, we're not acting on US pressure, and above all that they've an iota of GOVERNANCE, if they can ensure reversion of price hike on reduction of petroleum products prices, which was caused due to increase in petroleum products. The agony of our system is that since the time of independence, the rich & fuedals were the law makers & legislators, claiming immunity for themselves, getting financial & law immunity benefits for themselves, while boasting to be pefroming for common people. The most ridiculous is the case of all allies in power including the Sharifs, whose hyppocrisy can't be matched to anybody else; e.g, the Sugar mafia was earning well when Sugar was Rs 22/- per kg, they took it to Rs 120/- per kg & I pity the honourable Courts' inability to get the wrongfl profits out of big people's pockets, rather instructed them to freeze the prices to Rs 70/- (no logic provided). The Poultry Control sheds' scandal is another big one; I hope some learned people throw light on them.

Haris | 12 years ago | Reply What exactly is 1.70??? If we recall, the lowest denomination used in Pakistan is 1 rupee so all the other cent amount goes in whose pocket coz we never get our change back????

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