Seven-month petrol sales dip by 11pc: Cut in PDL urged
By Aamir Shafaat Khan
KARACHI, FEB 14: The government is netting Rs23.45 per litre on sale of petrol in the form of taxes and duties as against Rs25 in December 2005.
Petrol sales during July-January 2005-06 fell by 10.67 per cent to 702,060 tons from 785,947 tons in the same period of last fiscal, a source in the Oil Companies Advisory Committee said on Tuesday. Petrol sales in January 2006 stood at 95,700 tons as compared to 107,800 tons in January last year, depicting a fall of 11 per cent, he said.
He added that the petroleum development levy (PDL) on petrol now stands at Rs15.23 per litre as compared to Rs16.97 a litre in December 2005 as the government reduced the PDL to offset the increase in domestic prices. While the General Sales Tax (GST) and excise duty are worked out at Rs7.34 and 0.88 paisa per litre.
As there appears no chance for consumers to see cut in petrol prices despite decline in Light Arab Crude prices during the last one month – the government should come to the rescue of consumers by reducing the PDL so that consumers could get some relief, a market analyst suggested.
However, petrol sales are expected to decline further in coming months as the CNG is fast gaining popularity despite slight increase in prices. Another threat to petrol is the LPG whose demand has been increasing, the analyst said.
In case the OGRA comes out with safety standards for use of LPG in auto sector, the petrol will further lose its market share.
The main reason of decline in petrol sales is the phenomenal increase in its price in the last few years on the back of rising Light Arab Crude prices.
Over 870,000 vehicles have so far been converted into CNG from petrol compared to 500,000 about one-and-a half- years back. The CNG is still cheaper by 45-50 per cent both in consumption and saving point of view.
Car makers are rolling out 12,000 cars per month of which more than 50 per cent are CNG fitted.
The price of LPG will determine its popularity among consumers in case OGRA introduces safety standards. The demand for LPG has already surged to 1,400-1,500 tons from 1,000 tons a day in the last one and a half years. However, LPG dealers said that the demand has now touched 2,000 tons a day from 1,500 tons a day.
Coming to other products, sale of diesel has improved in January 2006 to 563,000 tons as compared to 551,000 tons in January 2005 due to the increase in transport movement which remained depressed from October 8 to November in the quake-hit areas coupled with rains and snowfalls. Besides, movement of sugarcane has also started after delay in start of cane crushing by the millers.
Total sales of diesel in July-Jan 2005-06 stood at 4.22 million tons as compared to 4.5 million tons, showing a decline of 6.45 per cent. However, diesel outlook for Jan-Dec 2006 may improve with the onset of the main harvesting season from March to May.
Sale of furnace oil also plunged by nine per cent during January 2006 to 483,000 from 531,000 tons in January 2005. In July-Jan 2005-06, sale of fuel oil fell to 2.38 million tons from 2.93 million tons in the same period of 2004-05.
Fuel oil consumption is based on thermal power generation. But due to the increase in generation of hydel electricity and the availability of gas, the reliance on thermal power has reduced thereby reducing fuel oil demand in the last seven months.
