Petrol, diesel prices left unchanged to ‘offset expected increase’ next month – Newspaper

ISLAMABAD: Amid a significant shortage of revenue, the government increased the price of liquefied petroleum gas (LPG) on Monday by more than 11 percent, while rates for all other oil products remained unchanged in October to earn more than Rs4.2 billion in extraordinary income. About lower international prices.

The Oil and Gas Regulatory Authority (Ogra) had recommended a cut of up to 2.6 percent in local petroleum products in line with the fall in international oil prices. However, the government decided to obtain the largest amount of additional income due to a deficit of around Rs 100,000 million in the first quarter target.

Interestingly, the government did not transfer the benefit of lower international oil prices to consumers on the premise that it expected an increase in prices next month. "The government has decided to keep the prices of petroleum products at the current level to compensate for the expected increase in prices for the month of November 2019," the Ministry of Finance said in a statement.

An official said the government would obtain additional revenues of Rs2.4bn in high-speed diesel (HSD) in October, while other unexpected revenues of Rs1.7bn would accumulate due to unchanged oil prices. The government has been repeatedly saying that it would happen to consumers in case of any reduction in international prices when they rose. Some minor unexpected gains would also flow from light diesel oil prices.

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The Ministry of Finance said that the decision to retain the prices of petroleum products in September for next October has been taken in view that oil prices in the international market show a growing trend since mid September 2019 and the expectation that prices could remain. on the upper side in the month of November 2019 & # 39 ;.

The Ogra had calculated a reduction of up to 2.6pc in the prices of the main oil products for October, as crude oil prices decreased to $ 59 per barrel in the Middle East at the end of August from $ 63 per barrel at the end of July. Based on the price of import parity of the state of Pakistan oil (PSO), Ogra had calculated a decrease of Rs3.23 per liter in the price of HSD, Rs2.55 per liter in gasoline and Rs2.41 per liter per light diesel price. (I DO). On the other hand, the regulator had calculated an increase of Rs1.19 per liter for kerosene oil.

In view of the government's decisions, the ex-deposit price of HSD and LDO will remain unchanged at Rs127.14 and Rs113.24 per liter. Similarly, the ex-tank price of kerosene oil and LDO would also remain at the existing level of Rs99.57 per liter and Rs91.89 per liter.

The federal revenue board would issue a separate notification to increase the tax rates that are currently at a standard rate of 17pc overall. In addition to the 17pc GST, the government has more than doubled the rate of oil collection in HSD in recent months to Rs18 per liter instead of Rs8 per liter, while gasoline collection has also increased by 50pc to Rs15 per liter instead of Rs10 per liter. The oil rate on kerosene and LDO oil remains unchanged at Rs6 and Rs3 per liter, respectively.

In recent months, the government has begun to increase oil tax rates to partially recover a significant income deficit facing the Federal Revenue Board. The collection remains in the federal kitten unlike the GST that applies to divisible group taxes and, therefore, the provinces take over 57 percent of the share.

Gasoline and HSD are two main products that generate most of the revenue for the government due to its massive but growing consumption in the country. Total HSD sales are reaching 800,000 tons per month against the monthly consumption of around 700,000 tons of gasoline. Kerosene and LDO oil sales are generally less than 10,000 tons per month.

Simultaneously, the Ogra notified an increase of 11.14pc in the price of LPG for October at Rs125.05 per kg, to Rs12.53 per kg of Rs112.54. As such, the price of the domestic cylinder of 11.8 kg increased by Rs147.87 to Rs1,475.63 instead of Rs1,328.

The Ogra said that the price of LPG producers (propane 40pc and butane 60pc) had been determined at Rs67,214.83 per ton against Rs56,504.52 tons in September. This price includes special taxes of Rs85 per ton. The producer price was calculated at Rs793.13 per 11.8 kg cylinder.

Posted on Dawn, October 1, 2019