Another cut in petrol and diesel prices on the cards

There is a possibility of a decrease in oil prices in Pakistan once again and it would be third time in a row that petrol, diesel and kerosene will be cheaper, reported 24NewsHD TV channel on Saturday.

According to a report, for the next 15 days from September 1, petrol and diesel prices are estimated to decrease by Rs5 to Rs6 per litre, which is mainly due to low oil prices in the global market.

Informed sources said that in the global market petrol and diesel prices have been down $2 to $2.30 per barrel for the last 15 days, with the final exchange rate calculation and current tax rates likely to reduce petrol and diesel prices by Rs5 to Rs5.50.

Officials said that the average price of petrol in the global market fell to $80.40 per barrel from $82.50 per barrel, while diesel was recorded at $88 per barrel against $90.30 per barrel in the current fortnight.

The import premium on petrol fell by around $0.50 a barrel to $8.50 a barrel, while diesel remained at $5 a barrel.

The ex-depot petrol price per liter is Rs260.96 and diesel price is Rs266.7 per litre.

In the last price review effective from August 14, the government had reduced the prices of petrol and diesel by Rs8.47 and Rs6.70 per litre respectively.

Thus, the total reduction in petrol and diesel prices last two times was Rs 14.64 and Rs 17.56 per litre respectively while on July 31 it was reduced by Rs6.17 and Rs10.86 per litre.

The government for collecting Rs12.80 trillion in the next financial year and in order to do this, the maximum limit of petroleum levy was increased to Rs70 per liter in the finance bill, while Rs10.19 trillion were collected during the last financial year, which is about Rs150 billion more than the target of Rs869 billion.

At present, the government is levying a tax of around Rs78 per liter on petrol and diesel, however the General Sales Tax (GST) on all petroleum products is nil.

The government is collecting a levy of Rs60 per liter on both products. Government is also collecting customs duty of around Rs18 per liter on petrol and diesel. In addition to which around Rs17 per liter is going to the oil companies and their dealers as distribution and sale margin.