Ogra proposes slashing petroleum prices by 5.8%

Firdous Ashiq Awan says govt to pass on benefits of reduction in oil prices to consumers

KARACHI: The Oil and Gas Regulatory Authority (Ogra) has recommended the government to slash for the month of September prices of all petroleum products by up to 5.8 per cent in line with fluctuation of global oil prices.

The government has also expressed resolve to pass on benefits of reduction in oil prices to consumers “as a step to provide relief to the masses” and not to take benefit of reduction in oil prices globally.

“The second year of the PTI [Pakistan Tehreek-e-Insaf] government under leadership of Prime Minister Imran Khan would bring good news regarding development and welfare of the people for a country,” said Special Assistant to Prime Minister on Information Dr Firdous Ashiq Awan has said in a tweet post.

Minister for Petroleum Omer Ayub Khan also confirmed that the government is going to slash prices of petroleum protects from September 1. “Government is going to provide complete and immediate benefit of reduction in petroleum products price,” he also wrote on Twitter.

Ogra has proposed the government to reduce the prices of petrol by Rs4.59 per litre (3.9%) to Rs113.24 per litre from existing Rs117.83 per litre. Petrol is an alternate to the compressed natural gas (CNG).

The consumption of petrol has increased in Punjab where all CNG retail outlets are using imported liquefied natural gas (LNG). Reduction in its price will have a positive impact on common people as almost half (45%) of all the petrol is consumed by motorcycles.

Price of high speed diesel (HSD) has been recommended to be cut by Rs7.67 per litre or (5.8%) to Rs124.80 per litre. The existing price of the HSD is Rs132.47 per litre. The HSD is widely used in transport and agriculture sectors. Reduction in its price will have direct inflationary impact on masses.

The regulator has recommended reducing price of kerosene oil by Rs4.27 per litre (4.1%) to Rs99.57 per litre. Its existing price is Rs103.84 per litre. Kerosene oil is used to burn stoves in remote areas like northern parts of Pakistan where liquefied petroleum gas (LPG) is not available.

Ogra has suggested a decrease of Rs5.63 per litre (5.8 %) in price of light diesel oil (LDO).In case the proposed reduction is approved; the LDO’s new price will be Rs91.89 per litre against existing price of Rs97.52 per litre. The LDO is used as fuel in industry.

Ogra has sent the summary to Ministry of Finance for final approval.

The government is charging 17 per cent general sales tax (GST) on all petroleum products.

Besides the GST, the government is charging another tax –petroleum levy on all petroleum products to pocket billions of rupees from the oil consumers. The government is charging Rs18 per litre petroleum levy on the HSD, Rs15 per litre on petrol, Rs6 per litre on kerosene oil and Rs3 per litre on the LDO.

The past government of Pakistan Muslim League-Nawaz (PML-N) had been charging petroleum levy ranging between Rs3 to Rs10 per litre. However, rates of the GST were higher during its tenure.

The earning from the GST also goes to provinces. However, the PTI government has reduced rates of the GST and increased rates of petroleum levy to collect more money for the federal kitty.