ISLAMABAD: Due to the sharp decline in crude oil prices in the international market, the Oil and Gas Regulatory Authority (Ogra) recommended that the government reduce oil prices to Rs 44 per liter in May 2020, Stay Connecting Reported.
The regulator suggested that the price of diesel could be reduced by Rs 33.94 per liter (or 31.6%), gasoline at Rs 20.68 / liter (21.4%), kerosene oil at Rs 44.07 / liter (56.9%) and diesel fuel Light (LDO) – Rs 24.57 / liter (39.3%).
If the government accepts the Office’s proposal, the price of gasoline will drop from the current Rs 96.58 per liter to Rs 75.9 per liter, and the price of diesel will drop to Rs 73.31 per liter from the current Rs 107.25 per liter.
Similarly, the price of LDO will drop to Rs 37.94 per liter from the current Rs 62.51 per liter, and the price of kerosene will drop to Rs 33.38 from the current Rs 77.45 per liter.
Petroleum Levy Increased to Meet the Revenue Shortfall
It is worth noting that the government also applies 17% of the total sales tax (GST) to all petroleum products. In addition, the government also collects the oil tax (PL) on these products, which is applied directly to consumers.
The gasoline tax was increased by Rs 4.75 to Rs 19.75 per liter from the previous Rs 15 per liter. The PL in kerosene also increased by Rs 6.33 to Rs 12.33 per liter, and the PL in LDO increased by Rs 1.94 to Rs 4.94 per liter.
Summary Moved to the Energy Ministry
Ogra submitted the resume to the Department of Energy (the oil division) and then sends this document to the Finance Department for approval. The government will decide on this later today.
In summary, the regulator proposed charging PL of Rs 24.20 / liter for diesel, Rs 18.9 / liter for gasoline, Rs 6 for kerosene, and Rs 3 per liter for LDO.
The government, to fill the income gap in March 2020, increased the collection of oil (PL) for these products. The PL for diesel increased by 7.05 to Rs 25.05 per liter.
It is worth noting that due to COVID-19 there is an excess of oil since supply is large and demand is very low, so prices have even changed this month.
This month, when future international contracts expired in May, the price of oil reached even less than $ 54 per barrel. On Wednesday, the price of contracts for the month of June was less than $ 15 per barrel.
Economist opposes lowering fuel prices
However, the renowned economist Dr. Kaiser Bengali opposed the reduction of police prices in the country.
“Domestic fuel prices must NOT be reduced, the surplus must be used to (1) liquidate the circular debt, it will stabilize fiscal base n (2) lower GST Goods rate, it will boost industry n employment,” Bengali said in a statement on Thursday.
Domestic fuel prices must NOT be reduced, surplus must be used to: (1) liquidate circular debt, it will stabilize fiscal base n (2) lower GST Goods rate, it will boost industry n employment.
— Dr. Kaiser Bengali (@kaiserbengali) April 30, 2020
Originally Published By Geo.