Ogra recommends 8-12pc cut in oil prices

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) recommended on Friday a reduction by eight to 12 per cent in prices of petroleum products for the month of September.

In a summary sent to the ministries of petroleum and finance, Ogra says international prices of all oil products dropped significantly in August after oil producers increased output.

Based on existing tax rates and PSO purchases from international market, Ogra worked out a reduction of Rs6.14 per litre (8pc) in the ex-depot price of petrol to Rs70.62 from Rs76.76 and that of high speed diesel (HSD) by Rs7.60 (8.93pc) per litre to Rs77.45 from Rs85.05.

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The price of kerosene has been recommended at Rs52.81 per litre, a reduction of Rs7.30 (12.14pc), from Rs60.11. Ogra has called for reducing the price of high octane blending component (HOBC) by Rs7.37 per litre (8.9pc) to Rs75.42 from Rs82.79 and that of light diesel oil (LDO) by Rs6.80 (12pc) to Rs49.79 from Rs56.59.

A finance ministry official said the government had also passed on partial relief to consumers last month by making adjustments in tax rates to protect its revenue target. He said the same strategy would be followed this time but without putting any additional burden on consumers.

A final decision about how much relief is to be passed on to consumers will be taken by the prime minister on the advice of the finance ministry and the Federal Board of Revenue.

At present the government is charging 20pc general sales tax on petrol, LDO and kerosene and 37pc on HSD. It is also collecting petroleum levy of Rs9.78 per litre on petrol, Rs7.03 on HSD, Rs3 on LDO, Rs6 on kerosene and Rs14 on HOBC.

Petrol and high speed diesel are two major products that generate most of the revenue from the oil sector. The monthly sale of HSD across the country stands at over 600,000 tons, petrol at about 400,000 tons and HOBC and kerosene at less than 10,000 tons.

Published in Dawn, August 29th, 2015

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Comments (19) Closed

Sami

Aug 29, 2015 07:44am

We Pakistanis are horrible patriots. We love our country and proud of it. But nobody wants to pay taxes, make institutions better and respect law. No nation makes progress on emotions but but needs concrete measures.

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Capt Faraz

Aug 29, 2015 07:50am

Agreed with Mr Sami 's comments

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M Jamal

Aug 29, 2015 08:20am

@Sami.Totally agree and this applies on all of us from top to bottom.

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Tarique Ahmad

Aug 29, 2015 08:47am

Very True SAMI. For transparency seek, OGRA should release its details of their calculation methodology and basis, each month.

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WAQAR H

Aug 29, 2015 09:29am

Sami, I am too agreeing with you. But there is a question: why we pay taxes to corrupt people.

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pervaiz iqbal

Aug 29, 2015 10:01am

The price of petrol should be reduced by at least Rs. 15 - 20 per liter, going by the international prevailing price of the crude. It is obvious that the government will not do this. It will pass on a small percentage to the public and will try to give all sorts of crap for not being able to reduce the price further. This is where the opposition, particularly Imran Khan, is failing the nation. The government had consecutively increased the price of petrol on two previous occasions when the international price of crude had not risen. There was not a whimper from Imran Khan. Given that his main obsession is the rigged election of 2013, he should take some time out for other issues as well. I can't say what he will do if the issue of rigging in the last election is somehow settled to his satisfaction. The less said about the other political parties the better. PPP never seems inclined to take on the government on any issue, except when its own tail is stepped upon (arrest of Dr. Asim).

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pervaiz iqbal

Aug 29, 2015 10:07am

@Tarique Ahmad The government will never ask OGRA to release the computation-this is where the big money lies. But no one will ask the government to do this. They are all busy with petty issues. So much for the transparency. Can't the outgoing CJ order this during his remaining few days in office. He could earn the gratitude of this hapless nation.

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pervaiz iqbal

Aug 29, 2015 10:12am

@Sami Why doesn't the opposition raise this issue in the parliament? All the opposition members are concerned about is only own their privileges. Pathetic situation.

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AM.K

Aug 29, 2015 11:32am

Are the taxes being correctly utilized on 'METRO'.Other then salary class who is paying correct sassed takes ???

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FAREED HUSSAIN

Aug 29, 2015 12:44pm

despite so many price cuts in fuel prices public transport fares have not been revised down since Mush time, and the transporters have become even more notorious since ban on ChingChi Rickshaws. The ban was imposed without consideration public convenience, people could travel at short distance for just Rs 10, and minibuses had come within their skins. Now they use abusive language and fight public, and above all charge them hefty fares. For example, maximum fare of a minibus for any distance is Rs 17, there are routes where passengers are charged Rs 30 (A-3) and Rs 20 (D-7, G-17), and no one makes them accountable. The Ban on Rickshaws has also forced people to use more motorcycles and cars, increasing fuel demand....................Wake up City Admin and Prov. govt.

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Ghulam

Aug 29, 2015 01:16pm

@Sami All patriots are paying tax, only politicians and corruption mafia not paying taxes who both rule the country, so be informed!

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FAREED HUSSAIN

Aug 29, 2015 01:28pm

Here is what court should allow rickshaws with certain conditions to be run on the road instead of banning them altogether. Just allow six passengers to be carried and parking in lines, because these were two issues, which made them hazzardous on the road. And if anyone violates these rules, ban the rider/driver for six months to ride or drive any vehicle and if he fails to discipline himself again, banned him altogether. Banning a vehicle is no solution.

Recommend 0

Rashid Ishaq

Aug 29, 2015 01:41pm

@Sami Agreed as you can say recently people starts complaining against government for applying some taxes

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M.Saeed

Aug 29, 2015 02:26pm

When crude-oil prices were $140 per barrel in international market, pump petrol prices were about Rs.100 per liter in Pakistan. Now, the crude oil prices have dropped to less than $40 per barrel, the pump prices of petrol in Pakistan should be about Rs. 28 per liter, on the same ratio. But the prices actually around Rs.77, which is 275% higher !!!

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pervaiz iqbal

Aug 29, 2015 04:15pm

We were discussing about the need for OGRA to make the petroleum product price computation formula public to ensure transparency in the mechanism. Here comes the news that the government has decided to pass only a small fraction of the relief to the public despite the fact that OGRA had recommended 8-12 % cut in prices. So, what is the use of transparency when the government is hell bent to deprive the common man of any legitimate relief. This is where the parliamentary opposition can come to the rescue of the masses by forcing the government to be reasonable. Not so in Pakistan. Here, the opposition is least bothered as its fuel bill is paid from the public exchequer. Why no sit-ins for passing the benefit of cheaper oil to the masses? Point to ponder. The treasury and opposition benches are carved from the same log.

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pervaiz iqbal

Aug 29, 2015 06:10pm

Your news reporter is better informed than a vast majority of our Senators and MNAs, who, I am sure, do not know about the break up of the price of any petroleum product. He would prove to be a better representative of the people if returned to the assemblies. The present lot in the parliament is simply pathetic. They are so much insulated from the public that they feel ashamed to raise their (the public) issues in the parliament or start any campaign directed at securing any benefit for the people. Imran Khan, please come out of your perpetual "rigged election" syndrome. For once, speak against this injustice of depriving the masses of the legitimate benefit of the crude oil price crash. Otherwise, people would be correct to start believing that your followers mainly belong to the class that is least bothered about the price of the essential commodities.

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Ridwan

Aug 30, 2015 01:24am

Keep the prices the same. Use the increased revenue for infrastructure development!

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syed abbas

Aug 30, 2015 02:03am

They should not reduce prices. gasoline is$8/gallon in Britain instead of reducing prices 10 % of oil income should go to develop pipelines and energy resources

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Sab Se Pehle Pakistan

Aug 30, 2015 02:53am

Why is the delay? The price of crude dropped in the global market significantly quite a while ago and our corrupt and incompetent government is still selling it at the same price. Even the price drop is not good enough. It should have been more then that. This PML-N government is robbing poor people of their hard earned money and using it for their own ayashi/luxuries.

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