ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) in order to pass on to consumers the benefit of a fall in international market recommended to the government on Friday to reduce by up to Rs4.89 per litre (3.6 per cent) prices of petroleum products in the country with effect from May 1.
A senior government official said the Ogra summary seeking price reduction had been received at the ministry of petroleum and natural resources and a decision on the proposal would be made in consultation with the ministry of finance by Monday.
According to the summary seen by Dawn, Ogra has sought a reduction of Re1 per litre in the price of petrol (motor spirit) to Rs102.36 from the existing Rs103.36.
The highest reduction of Rs4.89 per litre has been proposed in the price of high octane blending component to Rs130.97 from the current Rs135.86 per litre.
Likewise, the price of high speed diesel has been proposed for reduction by Rs1.13 per litre to Rs105.87 from the current Rs107.
Ogra has recommended Rs2.13 per litre reduction in the price of kerosene to Rs97.82 from the existing Rs99.95. The price of light diesel has been proposed to be cut by Rs1.64
per litre to Rs97.10.
The percentage of reduction in prices of petrol has been estimated at about 1 per cent, 3.6 per cent for HOBC, 1.1 per cent for HSD, 2.13 per cent for kerosene and 1.7 per cent for light diesel oil.
Officials said the international prices of almost all petroleum products had dropped by about $1-3 per barrel since March 31, necessitating a proportional decrease in domestic prices.
Last month, the government had increased petroleum prices by up to 8.2 per cent but reduced it after four days by about 2.2 per cent by cutting down its share of petroleum levy.
They said the federal government’s request to provinces to reduce the general sales tax on petroleum products had not received any positive response. Since the GST was provincial revenue, the federal government could not reduce the 16 per cent GST at its own.
At present, the government is charging Rs8 per litre petroleum levy on petrol, Rs3.07 per litre on HSD and Rs3.32 per litre on kerosene oil.
In addition, the government collects 16 per cent GST on all products that comes to about Rs13 per litre on kerosene, Rs15 per litre on motor spirit and about Rs17 per litre on high speed diesel.
Last month, the Economic Coordination Committee (ECC) of the cabinet decided that petroleum prices should be adjusted on a fortnightly basis, instead of the monthly basis.
However, the government opted not to readjust prices on April 15 as the international prices had started to come down. An official said the ECC decision would be implemented this month. This would mean that after the price change on April 30, the next price review would be made on May 15.
This was against an Ogra recommendation that sought fixation of oil prices on a quarterly basis to ensure stability in the market.
It had also recommended that in view of increasing demand for petrol, the government should arrange its import through long-term contracts to make some savings.
