Govt slashes petrol price by Rs15 to ‘provide relief to consumers’ – Business

The government announced on Thursday a reduction of Rs15 per liter in the price of gasoline, from Rs27.15 per liter in the price of high-speed diesel (HSD), Rs30.01 per liter in the price of kerosene and Rs15 per liter in The price of light diesel (LDO).

The price of gasoline has been reduced to Rs81.58 from Rs96.58, while HSD will be available at the rate of Rs80.10 after a reduction of Rs27.15 from Rs107.25 per liter. The price of kerosene has been reduced to Rs47.44 from Rs77.45 and LDO, which was previously priced at Rs62.51 will now be priced at Rs47.51.

According to a notification issued by the Ministry of Finance, the government made the decision to reduce the prices of petroleum products to "provide relief to consumers."

"The government is extending maximum aid to the public. Aid packages include the economic stimulus package, the Ehsaas emergency aid program, the incentive package for SMEs and many other aid measures. The last one is [a] considerable decrease in the prices of petroleum products, "said the notification.

The new prices will take effect from May 1.

Earlier on Wednesday, the Oil and Gas Regulatory Authority (Ogra) had recommended a reduction of up to Rs44.07 per liter in the price of major oil products for the month of May to share the benefit of lower international prices with consumers.

The regulatory authority had proposed a decrease from Rs33.94 to Rs73.31 due to the HSD price, a 31.6 percent drop from Rs107.25.

It had also produced a decrease from Rs20.68 per liter (21.4pc below) to Rs75.9 for gasoline, which was previously Rs96.58.

Ogra also proposed that the price of kerosene oil be reduced from Rs44.07 to Rs33.38 per liter, a decrease of 56.9pc from the rate of Rs77.45 per liter that took effect in late March.

For LDO, it was recommended that the price be reduced by Rs24.57 (-39.3pc) to Rs37.94 per liter.

The decline in fuel prices comes as oil prices fell amid concerns about declining crude storage capacity worldwide and fears that fuel demand will only slowly recover once countries ease the restrictions placed on economic and social activity to combat the coronavirus pandemic.

Oil prices have fallen to record lows this month, with the US benchmark West Texas Intermediate dropping below zero for the first time when governments around the world closed businesses and air travel stopped due to the virus.

An agreement between major oil-producing nations to cut production by 10 million barrels per day since May 1 has done little to calm the market.

The production cuts "will probably take weeks to appear on the physical market, therefore we are still stuck with inventory problems that will continue to curb any appearance of bullish appetite," said AxiCorp global market strategist Stephen Innes.