Petrol price expected to be lowered by 10pc on 15th
By Khaleeq Kiani
ISLAMABAD, Dec 1: The government on Thursday hinted at reducing petroleum prices in the next quarterly review due on Dec 15 if international market remained stable, saying its losses for the current year stood recovered.
Petroleum Secretary Ahmad Waqar gave the indication at a press conference following a meeting presided over by the prime minister, a day after the Supreme Court had decided to constitute on Dec 11 a larger bench for detailed hearing on petroleum pricing.
Sources in the prime minister’s secretariat told Dawn that the petroleum ministry had forwarded a ‘note’ for reduction in petrol prices by 10 per cent because of $100-120 per ton loss the government was incurring as ‘opportunity cost’ in the export of surplus petrol as naphtha at subsidised rates. The reduction in petrol prices by 10 per cent meant more than Rs200 million reduction in government revenue.
The prime minister did not agree to the proposal, the sources said.
When asked if the government was making preparations for the general elections through reduction in prices given the ruling Pakistan Muslim League’s political influence over the federal government and a unanimous resolution adopted by the Punjab Assembly on Nov 21 demanding reduction in prices, the secretary said he could not comment on political issues.
He repeatedly said: "The government may review petroleum prices on Dec 15."
Mr Waqar declined to comment on a statement given by the Prime Minister’s Advisor on Finance Dr Salman Shah on Wednesday that the government could not reduce the prices at present.
When reminded that the finance secretary had said a few days ago that the government could not reduce the prices for three to four months because of Rs13 billion arrears due to the oil industry, Mr Waqar said the government had to recover only Rs1.2 billion in the current fortnight to reach a `no-profit, no-loss" situation.
Responding to a question about gas prices, he said the government had received a tariff determination from the Oil and Gas Regulatory Authority (Ogra) and was reviewing it. Ogra had determined an average reduction of 10-14 per cent in gas prices.
He said the revision in prices would be made with effect from Jan 1, 2007, as required under the law.
He said the government had estimated to collect Rs15.9 billion in petroleum development levy in 2005-6 and it collected about Rs18.5 billion and the additional recovery was paid out to the oil industry to compensate its previous year’s loss of Rs2.6 billion.
He said the government was paying Rs1.2-1.5 billion to refineries as price differential claim (PDC) per month on the basis of audited claims. However, the government had yet to pay Rs18 billion as PDC for the last financial year.
