ISLAMABAD: The prices of petroleum products are estimated to register a reasonable decline later this month as a result of drop in the price of crude oil in international market during the current month.

Informed sources told Dawn on Friday that the price of crude oil had so far moved down by about seven per cent during this month, but consumers in Pakistan would get the benefit of only four per cent because most of oil shipments came when the price of crude oil hovered around $104 per barrel.

The decline in crude oil’s price in international market have partially been offset by a recent depreciation of rupee against dollar from Rs99 to Rs101 following the continued political adventurism in the country as a result of protests by Pakistan Tehreek-i-Insaf and Pakistan Awami Tehreek in Islamabad.

The prices of petroleum products are anticipated to come down further next month if the price of crude oil sustains at $107 per barrel.

An official said that the Oil and Gas Regulatory Authority (Ogra) had worked out estimates for reduction in the prices that would be finalised and sent to the government next week once another and last shipment of oil products reached Karachi. But that would only add to the price reduction estimated so far because the last shipment was booked when crude price had come down.

On the basis of oil shipments already arrived, the price of petrol (motor spirit) would go down by Rs3.78 per litre and that of diesel by Rs2.27 per litre.

The price of high octane blending component (HOBC) has been estimated to come down by Rs3.50 per litre and those of kerosene and light diesel oil by Rs2 and Rs1.98 per litre, respectively

In view of political difficulties the government might pass on the full impact of an ease in international oil prices to consumers to win over maximum public support, an official said when asked if the government could consider a demand by the oil industry to increase commissions on the sale of petroleum products for oil companies and dealers.

Last month too, the government had not increased the prices of petrol, diesel and HOBC even though Ogra had worked out an increase in their prices and suggested reduction in kerosene and LDO prices.

The prime minister had allowed cut in kerosene and LDO prices, but rejected increase in prices of other products.

Apart from Rs6 to Rs14 per litre petroleum levy, the government also charges 16 per cent general sales tax on the prices of all oil products.

Published in Dawn, August 23rd, 2014