The government announcement on Saturday that it will cut prices of petroleum products came as a welcome respite for consumers long accustomed to being fleeced at the petrol pump. Ministry of Finance, in view of decrease in global oil prices, notified reduction in prices for the month of September, dragging down the rate of petrol by Rs4.59 from Rs117.83 to Rs113.24. The government also slashed diesel price by Rs5.33 per litre, kerosene oil by Rs4.27 and light diesel oil (LDO) by Rs5.63. The new rate of diesel, therefore, will be Rs127.14, that of light diesel oil, Rs91.89, and kerosene oil, Rs99.57 per litre. The government, this time accepted the Oil and Gas Regulatory Authority’s recommendations in full.
Starting from September 1, the new rates will remain in force till September 30. The move comes as the Brent oil price in international market on August 30 was recorded at $60.43/barrel, notably lower that what it was on July 30 – at $64/barrel. In April and June, it was hovering around $72/barrel.
The concession to the general public may, in part, be thanks to the Saudi largesse. Since July 2019, Pakistan started receiving monthly oil supplies worth $275 million from Riyadh on deferred payment. This arrangement means Islamabad will get oil facility to the tune of $9.9 billion over the next three years.
The ministry, while making the announcement, said that these prices in terms of rupee parity for petrol are significantly lower than regional markets like India (Rs168.25/litre), Sri Lanka (Rs144.15/litre), Bangladesh (Rs168.79/litre) etc.
Unlike in case of petrol, kerosene oil and LDO, the government has not passed on full relief to the consumers of HSD which is widely used in agriculture and transport sectors and any fluctuation in their prices directly impacts the general public. One wonders why.
Published in The Express Tribune, September 2nd, 2019.