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A New Year 'gift': Rs 6.25 cut in petrol prices

Prime Minister Nawaz Sharif has announced a reduction of Rs 6.25 per liter in petrol prices but acknowledged that full impact has not been passed on to the public to make up for Rs 17 billion revenue loss in total. Addressing a news conference here on Wednesday, he said that 5 per cent additional General Sale Tax (GST) has been imposed on petrol prices due to revenue loss of Rs 68 billion.

However, he said that sale tax on furnace oil has not been increased as it was being used to produce electricity, which was already on high side due to fuel mix, line loss and theft. Sharif further stated that furnace oil price has declined to Rs 43,015 from Rs 79,220 per ton, which enabled the government to reduce per unit electricity price to Rs 2.32. He added that reduction in electricity price was a very big announcement but it was overshadowed by Peshawar tragedy.

The Prime Minister said that petrol prices are being reduced by Rs 6.25 per liter, HOBC Rs 14.14 per liter, Kerosene oil Rs 11.26, light diesel oil Rs 10.48 and High Diesel Oil by Rs 7.86 per liter. He also regretted that transporters have not passed on the benefit of decline in oil prices to the public. The Prime Minister added that he would ask the provincial governments to ensure that reduction in oil prices was passed on to the people. The government, he said reduced petrol prices by Rs 29.69 since August 31, 2014 kerosene oil by Rs 25.13, HDS by Rs 23.11 light speed diesel by Rs 25.77 and HOBC by Rs 42.50.

As a result, he said that people had received Rs 400 billion benefit. He said that potato price in the whole sale market has declined to Rs 10 per kg. The government is trying to provide as much relief as possible to the people despite the fact that it has to face some unforeseen expenditure on account of floods, IDPs and Zarb-e-Azab whereas the Finance Minister has to manage all these expenditures from within the budget. He maintained that the country's macro-economic indicators have been improving rapidly. Responding to a question about gas and electricity shortage, he said that the problems of decades can not be fixed in days and the government is taking medium and long terms measures to address the issue. He said that the government is striving hard to bridge the gas and electricity shortage and new projects in the offing would add relatively cheap electricity to the system. The Prime Minister added that gas pipeline was being laid from Gwadar to import gas from Iran to overcome the gas shortage.

Copyright Business Recorder, 2015