ISLAMABAD: The government on Friday reduced the price of petrol by Rs2.73 per litre and kept the rates of all other petroleum products unchanged.

The decision to this effect was taken at a meeting between Prime Minister Nawaz Sharif and Finance Minister Ishaq Dar and on the basis of recommendations made by the Oil and Gas Regulatory Authority (Ogra).

With the cut the price of petrol has moved down from the existing Rs112.76 to Rs110.03 per litre.

The prices of high octane blending component (HOBC) will remain unchanged at Rs141.23 per litre, kerosene at Rs106.76 per litre, high speed diesel at Rs116.75 per litre and light diesel oil (LDO) at Rs100.22 per litre.

An Ogra official said that based on international oil prices, the regulator had worked out a reduction of Rs3.44 per litre in the price of petrol if the petroleum levy was to be kept unchanged at Rs9.40 per litre.

The finance minister, however, directed that the levy be increased to Rs10 per litre as the maximum permissible under the finance bill.

The levy on petrol was, therefore, increased by 60 paisa per unit, necessitating another 11 paisa per unit increase in the form of general sales tax. As a consequence, the remaining reduction of Rs2.73 per litre was passed on to consumers.

Ogra had also worked out a reduction of Rs3.02 per litre in the price of HOBC on the basis of existing rate of petroleum levy. The finance minister desired that this should be adjusted against a cushion available in the petroleum levy. The HOBC rates were kept unchanged.

He said Ogra had worked out an increase of 49 paisa per litre in the price of kerosene, three paisa in the rate of high speed diesel and 31 paisa per litre in light diesel oil rates.

The finance minister, however, informed the prime minister that if the petroleum prices were maintained, the subsidy to be picked up by the government would be less than Rs1 billion.

So, the prime minister decided to keep the prices of kerosene, HSD and LDO unchanged.