November 25, 2008	Tuesday	Ziqa'ad 26, 1429

ISLAMABAD, Nov 24: The government is mulling over a proposal to make petrol cheaper than diesel to enable the country’s refineries to operate at their full capacity and save foreign exchange.

Industry sources told Dawn that the proposal had been forwarded to Prime Minister Yousuf Raza Gillani by the ministry of petroleum and natural resources.

At present, petrol (premium motor gasoline) is being sold at Rs66.66 a litre and high speed diesel at Rs61.14.

International crude oil prices have come down to $53 a barrel from a peak of $147 a barrel in July. But since refineries in the country are operating generally at half their capacity, the government has to spend foreign exchange on the import of refined petroleum products.

The sole reason behind the inability of refineries to operate at full capacity is their inability to cultivate domestic market for petrol as it is now considered the rich man’s fuel.

“Premium motor gasoline, which we call petrol, is the prime product for any refinery. The lesser the refining of gasoline, the lesser refining activities in a refinery,” an official source told Dawn.

Now, if a single customer is purchasing petrol, seven others at the same time getting their vehicles’ tanks filled with diesel.

The official said the government would implement the plan gradually and in future any reduction in the price of petrol would be double than that of diesel.

An industry source told Dawn that the government was analysing the impact of cheaper petrol on the country’s transportation system, which mainly ran on diesel. Heavy vehicles normally consume diesel and the decision would definitely affect the sector.