December 01, 2008	Monday	Zilhaj 2, 1429

ISLAMABAD, Nov 30: The government reduced on Sunday prices of petrol and high octane blending component by Rs9 per litre.

Prices of kerosene and light diesel oil were also reduced by Rs5 and that of high speed diesel by Rs4 per litre.

Now the price of Rs57.14 a litre of diesel and that of petrol at Rs57.66 are almost equal. Earlier, diesel cost Rs12 a litre less than petrol.

The government has decided to discourage the use of diesel by gradually making it costlier than petrol.

This is the third consecutive reduction in the price of petroleum products over one and a half months.

On Nov 15, prices of petrol, diesel and kerosene were reduced by Rs10, Rs3 and Rs5 per litre, respectively.

A reduction in petrol consumption, which is almost seven times (700 per cent) less than that of diesel, has caused refineries to operate at around half their capacity. Petrol is the prime product for refineries and less refining of petrol means their reduced operations.

The situation has forced the government to import more refined petroleum products than crude oil, thereby paying more in foreign exchange and adding to current account deficit.

Although the government has started passing on some of the relief it has gained from a gradual decline in the international crude prices, domestic consumers are yet to see a corresponding reduction in the fares of airlines, trains, buses and trucks.

People have been hoping for a considerable cut in domestic and international air fares because jet fuel prices have dropped by almost half since crude prices started sliding down in the international market.