ISLAMABAD: Setting aside the Oil & Gas Regulatory Authority’s (Ogra) request for up to Rs5 per litre cut, the government on Tuesday reduced the prices of petroleum products by up to Rs1.50 per litre for next 15 days to pass on partial impact of lower international market.

On the other hand, Ogra increased the prices of liquefied petroleum gas (LPG) by 2.9pc of Rs58 per 11.8kg cylinder to Rs2060 for September. LPG prices have surged by 31pc since April 30 this year from Rs1,572 per cylinder.

According to a notification issued by Ministry of Finance, the prices of petrol, high speed diesel (HSD) and kerosene oil were reduced by Rs1.50 per litre and that of light diesel oil by Re1 per litre.

As such, ex-depot price of petrol was fixed at Rs118.30 per litre instead of existing rate of Rs119.80 and that of HSD was set at Rs115.03 per litre against Rs116.53 per litre at present.

Likewise, the ex-depot price of kerosene was set at Rs86.80 per litre instead of Rs88.30 at present, down by Rs1.50 per litre. The ex-depot price of light diesel was also decreased by Re1 per litre to Rs84.77 against existing price of Rs85.77 per litre.

In its working paper, the Ogra had recommended Rs5 and Rs3.50 per litre reduction in the ex-depot price of HSD and petrol respectively.

Likewise, the Ogra had sought Rs2 and Rs3 per litre cut in the ex-depot price of light diesel and kerosene oil, respectively.

However, the government increased the tax rates on all the four products between Re1 and Rs3.50 per litre to mop up revenues.

The finance ministry said the government reduced the prices to provide maximum relief to the consumers despite international price fluctuations. “The government is firmly committed to ensure stability in prices of essential commodities and has sustained the price pressure in line with its commitment to the common man,” said the finance ministry adding the petroleum levy was kept at minimum.

The petrol and HSD are two major products that generate most of revenue for the government because of their massive and yet growing consumption in the country. Average petrol sales are touching 750,000 tonnes per month against the monthly consumption of around 800,000 tonnes of HSD. The sales of kerosene oil and LDO are generally less than 11,000 and 2000 tonnes per month.

Under the revised mechanism, oil prices are revised by the government on a fortnightly basis to pass on international prices published in Platt’s Oilgram instead of previous mechanism of monthly calculations on the basis of import cost of Pakistan State Oil.

Published in Dawn, September 1st, 2021