ISLAMABAD: The prices of petroleum products may go down by up to Rs5 per litre for the next fortnight if the calculations of the Oil & Gas Regulatory Authority (Ogra) are accepted by the government.

However, a senior official told Dawn that the Ministry of Finance would oppose any reduction in prices to recoup some of the revenue loss it had allowed early this month through reduction in tax rates. A final decision would be announced by the finance ministry on Tuesday.

Petroleum Division sources said the working paper on the prices of petroleum products from the Ogra had been received. The working paper on pricing is based on existing petroleum levy and general sales tax rates and import parity price.

According to the working paper, the regulator has calculated Rs3.50 per litre reduction in the ex-depot price of petrol and about Rs5 per litre decrease in the ex-depot price of high speed diesel (HSD).

Likewise, the ex-depot price of light diesel and kerosene oil has been calculated to go down by Rs2 and Rs3 per unit, respectively.

These price cuts have been worked out because of lower international oil prices even though exchange rate had deteriorated over the past 15 days of August.

As of now, the government is charging 17 per cent general sales tax on HSD, followed by 10.54pc on petrol, 6.70pc on kerosene and 0.20pc on light diesel. The standard GST rate is 17pc which meant the government was foregoing significant revenue flow.

The government is also charging a negligible Rs2.05 per litre petroleum levy on HSD and 24 paisa per litre on light diesel and zero on petrol and kerosene. This meant the government was also losing substantial revenue on a solely federal tax. Until last year, the government used to charge up to Rs30 per litre petroleum levy on HSD and petrol and Rs6-8 per litre on kerosene and light diesel.

On August 15, the government had kept unchanged the price of petrol at Rs119.80 per litre and that of HSD at Rs116.53 per litre. On the other hand, it had increased the ex-depot price of kerosene by 81 paisa per litre to Rs88.30. Also, the ex-depot price of light diesel oil was increased by Rs1.10 per litre to Rs85.77.

Published in Dawn, August 31st, 2021