OGRA proposes reduction of Rs2.55 per litre in petrol price

Also recommends cut of Rs3.23 per litre in diesel rate

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Friday recommended the government to slash prices of petroleum products for October 2019 under the monthly price revision.

The oil and gas industry regulator, in a summary sent to the Petroleum Division, proposed a reduction of Rs2.55 per litre in the price of motor spirit (petrol) and Rs3.23 per litre in the price of high-speed diesel effective Tuesday (October 1).

Besides, Ogra recommended a reduction of Rs2.41 per litre in the price of light diesel oil (LDO). However, it suggested an increase of Rs1.19 per litre in the price of kerosene oil.

If the summary is accepted, the petrol price will come down to Rs110.69 per litre from existing Rs113.24 per litre whereas the diesel price will fall from Rs127.14 to Rs123.91 per litre.

In addition to these, the price of light diesel oil will come down to Rs89.48 per litre from the existing Rs91.89 whereas the kerosene oil price will go up from Rs99.57 to Rs100.76 per litre.

Since July 2019, Pakistan has started receiving monthly oil supplies worth $275 million from Saudi Arabia on deferred payments. Under this arrangement, Pakistan will get the oil credit facility to the tune of $9.9 billion over next three years.

Prices of petroleum products are determined by Ogra depending on the actual orders placed by Pakistan State Oil (PSO) for petrol and high-speed diesel purchase in the last month.

The government is currently charging 17% general sales tax (GST) on all petroleum products. Besides the GST, the petroleum levy ranging from Rs14 to Rs18 per litre is being charged on petrol and diesel and Rs3-6 per litre on kerosene and light diesel oil.

Ogra’s recommendation came in the wake of falling oil prices in the international market. Brent crude stood at $62.43 per barrel on Friday compared to $71 per barrel on September 16.

Earlier, crude prices had risen in the global market after drone attacks on Saudi Aramco’s oil facilities wiped off 5.7 million barrels of production, which was 5% of the global crude supply.

Published in The Express Tribune, September 28^th, 2019.

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