ISLAMABAD, June 14: The Oil and Gas Regulatory Authority (Ogra) recommended on Thursday up to 10.5 per cent (Rs10.46 per litre) reduction in the price of petrol to pass on to consumers the benefit of lower international prices.
A senior government official said that Ogra’s summary seeking reduction in prices of all petroleum products had been received by the ministry of petroleum and natural resources and a formal decision would be taken on Friday in consultation with the ministry of finance.
The prices will be effective for the fortnight starting on Saturday. He said that since petroleum levy on all products had reached its maximum level fixed by the Finance Bill, the entire price reduction recommended by Ogra would have to be passed on to the consumers.
According to the summary seen by Dawn, Ogra has sought a reduction of Rs10.46 per litre in the price of petrol (motor spirit) to Rs89.51 from Rs99.97. The highest reduction of 9.4 per cent or Rs11.75 per litre has been proposed for HOBC (high octane blending component) — from Rs125.07 to Rs113.32.
Ogra has sought a reduction of Rs6.08 per litre in the price of HSD (high speed diesel) to Rs99.69 from Rs105.77. It recommended Rs5.26 per litre reduction in the price of kerosene to Rs88.79 from Rs94.05. The price of light diesel has been proposed to be cut by Rs5.02 to Rs86.57 per litre from Rs91.59.
The percentage of reduction in prices of petrol has been estimated at 10.47 per cent, HOBC at 9.4 per cent, HSD at 5.75 per cent, kerosene at 5.6 per cent and light diesel oil at 5.48 per cent.
Ogra has also recommended a reduction of 10 per cent or Rs8.70 per litre in the price of JP-1, 8.7 per cent or Rs6.63 for JP-4 and 6.3 per cent or Rs5.25 for JP-8.
Officials said the international prices of almost all petroleum products had dropped by about $5-7 per barrel since May 31, necessitating a proportional decrease in domestic prices.
On May 31, the government partially reduced the prices of petroleum products, but increased the petroleum levy on them to earn an additional revenue of about Rs5 billion.
The levy has now touched its maximum level envisaged under the Finance Bill. The officials said the government did not have the cushion under the law to further increase its revenue share in the last month of the current financial year.
The government is currently charging Rs10 per litre petroleum levy on petrol, Rs14 on HOBC, Rs6 on kerosene and Rs8 on HSD.
In addition, it collects 16 per cent general sales tax on all petroleum products which fluctuates between Rs14 and Rs17 according to change in prices.