Govt poised for petrol price cut from Dec 1

Petrol may fall by Rs3.70 per litre and HSD by Rs4.28

ISLAMABAD:

The government is likely to slash prices of petroleum products in line with fluctuation in global oil prices, effective from December 1.

The latest projections show lower ex-refinery and ex-depot rates across major products.

Petrol price may drop by Rs3.70 per litre, high-speed diesel (HSD) Rs4.28 per litre, kerosene oil Rs0.73 per litre and light diesel oil (LDO) Rs6.35 per litre.

Petrol is expected to decline to Rs261.75 per litre from Rs265.45, registering a reduction of Rs3.70 per litre.

The oil industry has forecast a reduction in prices of high-speed diesel, which may come down to Rs280.16 compared with Rs284.44, registering a reduction of Rs4.28 per litre.

The price of kerosene oil is projected to decline to Rs193.61, slightly down from Rs194.34. Similarly, the light diesel oil may witness a drop to Rs164.45 against the existing price of Rs170.80.

High-speed diesel is widely used in the transport and agriculture sectors. Therefore, a reduction in its price will have a large impact on the lives of the people.

Petrol is used in motorbikes and cars, and Punjab province is its key user due to the ban on the use of indigenous gas in CNG stations.

Kerosene oil is used for cooking purposes mainly in the northern part of the country, where LPG is not available. The Pakistan Army is its key user, as light diesel oil is used in industry.

The government is currently charging a higher rate of taxes, which includes the petroleum levy (PL). The consumers are currently paying Rs75.41 per litre petroleum levy (PL) and Rs2.50 per litre CSL on high-speed diesel.

The consumers are also paying Rs97.62 per litre petroleum levy (PL) and Rs2.50 per litre CSL on petrol. There is no sales tax on these products.

The federal government had increased the rate of petroleum levy to pocket the entire tax collection on petroleum products. The sales tax collection moves to provinces, and therefore, the government had reduced sales tax to zero to deprive the provinces of the sales tax collection.

The petroleum levy was also supposed to invest in the development of the oil sector, like building oil storage in the country. However, the governments have been using the collection to meet their current expenditures.