POL prices slashed by as much as Rs14 per litre

The Oil and Gas Regulatory Authority (Ogra) revised prices of petroleum products on Wednesday, offering consumers considerable relief by cutting down rate of petrol by Rs6.25 and kerosene by Rs11.26 per litre. The new rates will be applicable from January 1 (today), the notification issued in this regard said.

Following the cuts, the price of petrol has come down to Rs78.28 per litre from Rs84.53 per litre. The price of High Speed Diesel (HSD), widely used in heavy vehicles and the agriculture sector, has come down to Rs86.23 from Rs94.09 per litre.

The price of kerosene, which is used as kitchen fuel in remote areas of the country, has fallen from Rs83.18 per litre to Rs71.92. The price of High Octane Blending Component which is used in luxury cars, registered a drop of Rs14.14, bringing its price down to 92.13 from Rs106.27 per litre. The price of light diesel oil was slashed by Rs10.48 per litre dragging its price down to Rs67.50 from Rs77.98 per litre.

Appearing before the media at his chamber in the Parliament shortly after addressing the Senate on National Action Plan to fight terrorism, Prime Minister Nawaz Sharif made a commitment to pass on the relief to consumers.

“I want to give good news to the nation,” he said while announcing the cut in prices. “I would ask provincial governments to make sure that relief is passed on to people.”

PM Nawaz pointed out, “The government has given relief of Rs400 billion by reducing petroleum products’ prices since August 31.”

In the international market, Brent crude prices have fallen more than 46% from the peak of $116 a barrel in June 2014. Though the alternatives of oil, such as shale oil, are vastly available in the market, some economic analysts argue that the collapse of crude market has more to do with falling demand due to a slowing global economy.

Saudi Arabian Oil Minister Ali al Naimi announced that the cartel of oil producers, the Organisation of Petroleum Exporting Countries (Opec), would not cut production even if the price fell to $20 a barrel. The world might not see the price back to $100 a barrel again, he added

Although direct consumers of petroleum products have benefited from the continued slump in oil prices, the development has had no major impact on the prices of commodities in the country due to reluctance of the transporters to pass on the cut in fares.

Published in The Express Tribune, January 1^st, 2015.