After initial gaffe, govt notifies cut in fuel rates | The Express Tribune (2024)

ISLAMABAD:

After an initial confusion about the fuel rates caused by the premier’s “directives” that was hurriedly clarified, the government on Friday slashed the prices of petrol and high-speed diesel (HSD) by Rs4.74 and Rs3.84 per litre, respectively.

The Finance Division, which usually issues a notification for the new prices of the petroleum products by 11:30 pm, was unable to release it this time until 12:35 am.

The new prices have been implemented from Saturday (today) and will remain unchanged for the next 15 days. After the reduction, the new price of petrol is Rs268.36 per litre against its previous rate of Rs273.10. Similarly, HSD will be available for Rs270.22 per litre instead of its earlier price of Rs274.08.

“The prices of petroleum products have seen a decreasing trend in the international market during the last fortnight,” the notification read.

“The Oil and Gas Regulatory Authority (Ogra) has worked out the consumer prices, based on the price variations in the international market,” it added. The prices of kerosene oil and light diesel oil (LDO) have also been reduced by Rs1.87 and Rs 3.88 per litre for the next 15 days.

After the reduction, kerosene oil will cost Rs171.61 per litre against its earlier price of Rs 173.48. Likewise, LDO will be available for Rs157.29 per litre after the cut instead of its previous rate of Rs161.17.

Read more:Fuel prices likely to be slashed on May 1

It should be noted that earlier on Friday, the state-run PTV on social media platform X carried Prime Minister Shehbaz Sharif’s directives to the finance ministry to reduce the prices of petrol and HSD by Rs15.40 and Rs7.90 per litre respectively.

Moments later, a clarification was issued by the PM’s Office and the post was deleted.

However, there was a massive gap between the prices announced in the ‘so-called’ PM’s statement and those notified by the Finance Division.

It is worth mentioning that the federal government had slashed the prices of petrol and HSD by Rs15.39 and Rs7.88 per litre, respectively for the second fortnightly of May as well.

The prices of kerosene oil and LDO had been reduced by Rs9.86 and Rs 7.54 for the last next fortnightly of May this year.

Notably, the price of crude oil has decreased in the international market during the second fortnightly of May and currently roaming around $81 per barrel.

The federal government is currently charging Rs60 per litre petroleum levy on both petrol and HSD. Currently, no general sales tax is being charged on these two products.

LPG

The Oil and Gas Regulatory Authority (OGRA) on Friday cut prices of liquefied petroleum gas (LPG) Rs3.86 per kilogram for June 2024, effective from Saturday (today).

The regulator said that the decision to reduce the price was made following a decline in global prices. After the decision by OGRA, the price of an 11.8-kilogram domestic cylinder will be Rs2,768, and the commercial cylinder at Rs10,650.

It is to be noted that last month too, the government slashed LPG prices by 4.74 percent or Rs11.88 per kilogram for May 2024.

The regulator said: “The LPG producer price is linked with Saudi Aramco-CP and US dollar exchange rate. As compared to the previous month Saudi Aramco-CP has decreased by 2 percent. The average dollar exchange rate has also gone down by 0.04 percent resulting to decrease in LPG consumer price by Rs45.62/11.8 kg cylinder (1.62 percent). The per Kg decrease in LPG consumer price is Rs3.86.”

The regulator determined the producer price of LPG, assuming a composition of 40 percent propane and 60 percent butane, to be Rs159,140 per tonne. This price includes an excise duty of Rs85 per tonne, excluding the petroleum levy of Rs4,669 per tonne. Consequently, the total cost for an 11.8 kg cylinder amounts to Rs1,878/11.8kg cylinder.

Before the imposition of an 18 percent general sales tax (GST), the producer price would have been Rs163,810 per tonne, resulting in a price of Rs1,933/11.8kg cylinder. The GST on Rs159,140 per tonne would have been Rs29,486 per tonne or Rs348 per 11.8 kg cylinder.

The OGRA has further calculated a maximum producer price of Rs193,295 per tonne or Rs2,281 per 11.8kg cylinder. The marketing, distribution, and transportation margins have been set at Rs35,000 per tonne, comprising a marketing margin of Rs17,000 per tonne, a distribution margin of Rs10,000 per tonne, and a transportation margin of Rs8,000 per tonne, resulting in a total margin of Rs413 per cylinder. Additionally, consumers are taxed with an 18 percent GST of Rs6,300 per tonne or Rs74.34 per 11.8kg cylinder, on the marketing and distribution margin of Rs35,000 per tonne.