The government on Saturday announced a substantial cut in the prices of petroleum products for the month of March, in line with prime Minister Imran Khan’s efforts to bring prices of commodities down in order to check the growing inflation in the country.
A reduction of Rs 5 per litre has been announced in the prices of petrol and high speed diesel. After the announcement, the new price of petrol has come down to Rs 111.60/litre from existing Rs 116.60/litre. The new price of high speed diesel is Rs 122.26/litre, against the previous rates of Rs 127.26/litre.
The prices of kerosene oil and light diesel oil have witnessed a decrease of Rs 7 per litre, bring those to Rs 92.45/litre and Rs 77.51/litre respectively.
The new prices will be coming into effect from March 1.
A summary earlier sent by OGRA to the Ministry of Energy had recommended that the prices of HSD may be reduced by Rs 7.23 per liter and petrol by Rs 5.79 per liter. The OGRA had calculated the prices on the basis of petroleum levy of Rs 18 per liter on the HSD, Rs 15 per liter on petrol, Rs 6 on kerosene oil, and Rs 3 on LDO.
Three different proposals had reportedly been in the field for price cut as the Dubai Crude rate came down from $62 per barrel on Jan 31 to $50 a barrel on Friday, down 19.35pc. On the other hand, the benchmark International Brent price reduced from $60 a barrel to $51 a barrel, down 18.33pc.
Over the last many months, the government had increased petroleum levy rates to partially recoup a major revenue shortfall faced by the FBR. The levy remains in the federal kitty unlike GST that goes to the divisible pool taxes and thus about 57pc cent share is grabbed by the provinces.
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.
Total HSD sales are touching 700,000 tonnes per month against monthly consumption of around 600,000 tonnes of petrol. The sales of kerosene oil and LDO are generally less than 10,000 tonnes per month.