Prices of petroleum products cut after considerable confusion – Newspaper

ISLAMABAD: Amid confusing statements by some cabinet members, the government announced Friday a reduction in the prices of petroleum products by up to 5.8 percent for the month of September due to the decrease in prices in The international market

It all started when the Special Assistant to the Prime Minister of Information, Dr. Firdous Ashiq Awan, announced the price cuts through his Twitter account, saying that the government would pass to the public the benefit of lower prices in the international market.

Later, the Special Assistant to the Prime Minister of Petroleum, Nadeem Babar, told Dawn that "according to the policy implemented last month, the government decided to approve the total impact of the price reduction."

However, this was soon contradicted by the ministry of finance. “The new POL prices reported in a section of the media are not correct. The official press release on the matter will be issued tomorrow night, ”said a statement from the ministry received through WhatsApp.

5.8pc reduction announced for September

While the confusion continued and several members of the cabinet began talks, Energy Minister Omar Ayub Khan went to Twitter to announce that the government was extending to people the full benefit of price reductions in the international market. It also issued a written statement about price adjustments.

Over time, cabinet members "agreed" to transfer the partial benefit of the reduction in the price of high-speed diesel (HSD) to consumers. It was agreed that the price of HSD would be reduced by 4{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} and the government would retain 1.8{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} as "extraordinary income."

In recent months, the oil and finance divisions have refrained from announcing oil prices and have been discreetly urging oil companies to increase rates.

On the basis of the invoices of importation of the oil of the state of Pakistan (PSO) and the existing taxes at high levels, the Regulatory Authority of Oil and Gas (Ogra) had calculated a reduction of Rs4.59 per liter in the price of the gasoline (engine alcohol) and Rs7.67 per liter in HSD.

The Ogra had calculated a cut of Rs4.27 per liter in the price of kerosene oil and a decrease of Rs5.63 per liter in the rate of light diesel oil (LDO).

An official said the price of crude oil had declined by more than 12 percent in the Arabian Gulf, from $ 72 on April 28 to $ 59 per barrel on August 30, but the government has been raising tax rates in the last months to meet the goals of the IMF.

Based on the import parity price of the PSO for purchases in August, the HSD ex-deposit rate has been set at Rs127.14 per liter for September against Rs132.47 per liter at present.

Similarly, the ex-tank price of gasoline has been reduced by approximately 3.9pc to Rs113.24 per liter instead of Rs117.83 per liter today.

The ex-deposit price of LDO has been reduced by Rs5.63 per liter (5.8pc) to Rs91.89 per liter instead of Rs97.52 at present. The price of kerosene oil was set at Rs99.57 per liter instead of Rs103.84, showing a reduction of approximately 4.1pc.

The government currently charges a general sales tax of 17 pieces on all petroleum products. In addition to the GST, the government is charging a rate of oil at the rate of Rs18 per liter in HSD, Rs15 per liter in gasoline, Rs6 in kerosene oil and Rs3 per liter in LDO.

Gasoline and HSD are the two main products that generate most of the revenue for the government due to its increasing consumption in the country.

Oil prices in the country have generally increased since the beginning of 2017.

Published on Dawn, August 31, 2019

Source: https://www.dawn.com/news/1502700/prices-of-petroleum-products-cut-after-considerable-confusion

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