After a fortnight of steady upward march, consumers are likely to heave a sigh of relief at the proposed cut of Rs6 per litre in petrol price, effective coming Monday.
The price of petrol, after two consecutive weekly hikes, is at an all-time high of Rs108.45 per litre at present.
Petrol prices went up by Rs6.82 and Re1.73 per litre on September 16 and 23, registering a total increase of Rs8.55 in 15 days. The prices of other petroleum products, however, will see a nominal reduction.
Reduced prices
The price reduction was recommended in a summary on weekly fuel price revision submitted by the Ministry of Petroleum and Natural Resources to the finance ministry on Saturday. The new prices will be notified on Sunday (today), and will be effective for a week starting Monday.
The price of petrol, the most commonly used fuel in cars, will go down to Rs102.45 per litre after a cut of Rs6 per litre.
The price of high-speed diesel (HSD), used mainly in transport vehicles and agriculture, will come down by Rs0.14 per litre to Rs113.16 per litre.
Kerosene oil, used as fuel in remote areas where liquefied petroleum gas (LPG) is not available, will see a price reduction of Rs0.40 per litre. After the proposed reduction, kerosene oil will sell at Rs101.23 per litre.
The price of light diesel oil (LDO), used for industrial purposes, will also fall by Rs0.95 per litre to Rs96.22 per litre.
Similarly, the price of jet fuels JP-1, JP-4 and JP-8 will come down by Rs0.79, Rs0.18 and Rs0.79 per litre to Rs90.42, Rs82.50 and Rs90.11 per litre respectively.
CNG prices
Following a cut in petrol prices, price of compressed natural gas (CNG), pegged at 60% of petrol’s, will also come down.
In region-I, comprising Balochistan and Khyber-Pakhtunkhwa, CNG will cost Rs93.79 per kg, down Rs5.49 from the existing Rs99.28 per kg.
In region-II, which includes Sindh and Punjab, CNG price will fall by Rs5.02 to Rs85.68 per kg, down from Rs90.70 per kg at present.
Consumers lose
Experts say the decision by the Economic Coordination Committee (ECC) to determine oil prices on a weekly basis has failed to benefit consumers, and oil dealers and hoarders are the major beneficiary of this new mechanism.
Freight margin
From Monday, the government will also implement an ECC decision on deregulation of freight margin on High-Octane Blending Component (HOBC). Following that, prices of HOBC, which is produced only by Pak Arab Refinery Company located in Mehmoodkot, near Multan, will vary across the country.
According to estimates, HOBC price in Karachi will rise by Rs0.36 per litre and decrease by the same amount in Lahore. In Islamabad, HOBC will be cheaper by Rs1.40 per litre.
Published in The Express Tribune, September 30th, 2012.
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I have noticed at the PSO(Pakistan state oil) pumps that they were selling petrol at PKR 108.9/litre contrary to the PKR 108.45/litre price announced by the OGRA in the current week.
ECC wanted to benefit oil dealers and hoarders by determining oil prices on a weekly basis... Everybody knows this!