Finance Minister Miftah Ismail on Sunday announced a reduction in the price of petrol by Rs3.05 per litre and a hike of Rs8.95 in the price of diesel.
“The government is able to decrease the price of petrol by Rs3.05 per litre,” he tweeted. “The price of diesel has however gone up by Rs8.95.”
The new prices came into effect from midnight. The price of kerosene oil was also increased by Rs4.62 per litre, while that of light diesel oil (LDO) was reduced by Rs0.12 per litre. The new prices are Rs227.19 for petrol, Rs244.95 for diesel, Rs201.07 for kerosene oil and Rs191.32 for LDO.
According to a press release issued by the Finance Division, the government had decided to revise the existing prices of petroleum products to pass on the impact of fluctuations in petroleum prices in the international market and exchange rate variation.
Senior government officials said that both major petroleum products – high-speed diesel (HSD) and petrol – were set to go down significantly with effect from August 1, but three major factors – currency depreciation, higher petroleum development levy (PDL) and increase in dealer commission – deprived the consumers of the benefit of the international price cut.
The officials said the government had committed a prior action with the International Monetary Fund (IMF) to increase PDL by Rs10 per litre on HSD, kerosene and LDO and Rs5 per litre on petrol to ensure a uniform rate of Rs15 per litre on all products at the start of August. At present, PDL is Rs10 per litre on petrol and Rs5 each on HSD, kerosene and LDO.
On July 14, Prime Minister Shehbaz Sharif had announced a reduction of Rs18 to Rs40 per litre in the prices of various products as international prices went down. This was the first time the PMLN-led coalition government reduced petroleum prices after it came to power in the second week of April.
Under the deal with the IMF, the government has to gradually increase PDL on oil products to a maximum of Rs50 per litre to collect Rs855 billion during the current fiscal year.
Meanwhile, in order to save Pakistan State Oil (PSO) from default, the Economic Coordination Committee (ECC) of the cabinet approved the clearance of the “outstanding payments accumulated during the tenure of the previous government and approved an amount of Rs30 billion as supplementary grant”. Of the total, Rs20 billion will be paid by today (August 1), while another Rs12.8 billion will be issued by August 4.
A statement issued by Finance Division said that the decision was made at a meeting, chaired by Finance Minister Miftah Ismail, at its office. The meeting was attended by Power Minister Khurram Dastgir Khan, MNA Shahid Khaqan Abbasi, State Minister for Petroleum Musadik Malik, Coordinator to PM on Economy Bilal Azhar Kayani, FBR chairman, OGRA chairman, federal secretaries and senior officers.
The Finance Division said that the Petroleum Division had “submitted a summary on SOS call for funds for PSO to meet international contractual payments during August 1-14”.
