ISLAMABAD: A big news about petroleum products as petroleum price is at lowest prices due to Corona. The Oil and Gas Regulatory Authority (Ogra) has proposed that the government cut the price of petroleum products by up to Rs44 per litre for May 2020.
The regulatory body suggested that diesel prices could be reduced by Rs33.94 per liter (or 31.6 per cent), Rs20.68/liter petrol (21.4pc), Rs44.07/liter kerosene oil (56.9 pc) and Rs24.57/liter Light Diesel Oil (LDO).
When the government follows the Authority’s recommendation, the petrol price will decrease from current Rs96.58/liter to Rs75.9/liter and the existing Rs107.25/liter diesel price will decrease to Rs73.31/liter. Similarly, from the current Rs62.51/litre, the LDO price will fall to Rs37.94/litre, and the kerosene price will fall to Rs33.38/litre, from the current Rs77.45/litre.
This should be remembered that the government still pays a general sales tax (GST) of 17 per cent on all petroleum goods. In addition, the government also imposes the fuel levy (PL) on certain goods, which is collected directly from customers.
The government had raised the petroleum levy (PL) on these goods in order to address the revenue deficit for March 2020. This raised the PL on diesel by 7.05 to Rs25.05 per litre. The fuel tax was increased from earlier Rs15 per litre by Rs4.75 to Rs19.75 per liter. PL on kerosene was also increased from Rs6.33 to Rs12.33 per litre, and from Rs1.94 to Rs4.94 per litre, PL on LDO.
Ogra has sent the report to the Energy Ministry (Petroleum Division) and will then forward this paper to the Ministry of Finance for approval. Today (Thursday) the government will take decision about it.
The regulator has recommended paying PL of Rs24.20/liter for diesel, Rs18.9/liter for petrol, Rs6 for kerosene and Rs3 a liter for LDO, according to the overview.
It is worth remembering that there is a surplus of oil due to COVID-19, because the supply is strong whilst the market is very low, and this month’s prices have also reached negative. The oil price also reached minus $54/barrel this month when the month of May’s foreign futures contracts expired. On Wednesday, the contract price is at lowest prices for the coming month of June was less than $15/barrel.