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October 01, 2008
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Wednesday
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Shawwal 1, 1429
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Oil prices remain unchanged
By Nasir Iqbal
ISLAMABAD, Sept 30: The government’s announcement on Tuesday to keep oil prices unchanged came as a disappointment to people who were expecting an ‘Eid gift’ because the prices in the international market had come down.
“The Oil and Gas Regulatory Authority (Ogra) has notified on the advice of the government that the maximum ex-depot sale price effective from Oct 1 will remain unchanged,” the announcement said.
It was widely expected that the petrol price would be reduced by Rs5 per litre.
The decision to maintain the oil prices was taken after rejecting proposals of the petroleum ministry for the next fortnight that included reduction in the petrol price. The proposal was based on calculations made by Ogra.
The authority observed that the average price in the gulf markets hovered around 100 dollars per barrel during the previous fortnight.
The finance ministry opposed further reduction in petrol price because it wanted to cross-subsidise diesel from taxes collected on petrol.
On Sept 15, the government had cut the petrol price by Rs5 per litre and increased the prices of high speed diesel (HSD), light diesel oil (LDO) and kerosene by Rs3.50 per litre.
According to an Ogra notification, the government will earn Rs19.52 as petroleum development levy on each litre of petrol sold and pay a subsidy of Rs8.21 per litre on kerosene and Rs7.41 on LDO, which is primarily used in certain machinery.
The government is paying a subsidy of Rs6.42 per litre on HSD.
The price differential claim (PDC) on HSD was Rs9.42 per litre in the previous fortnight, but it had dropped because of declining international prices.
The per litre prices of domestic petroleum products during the next fortnight will be: petrol Rs81.66, diesel Rs68.14, HOBC Rs96.08, kerosene Rs61.87 and LDO Rs60.
Meanwhile, the finance ministry has released Rs25 billion to oil marketing companies on account of accumulated subsidy amount.
According to sources, the government still has to pay around Rs45 billion as subsidy to the companies.
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