ISLAMABAD (January 15 2007): As the crude oil prices in the international market recedes, the government is likely to give relief to consumers and cut down petroleum products' rates on January 15 (Monday).

"The government is seriously considering to pass on the benefit of the low prices of petroleum to the public and announce the new rates for the fortnight commencing January 16 " said an official of the petroleum ministry when contacted by this scribe.

However, the reduction will be less than the actual difference in the rates. The government will reduce the prices partially for relief and use some percentage of petroleum prices to make up the revenue deficit.

The Oil and Gas Regulatory Authority will submit its recommendations to the ministry of Petroleum on January 15, for cut in petroleum products. The recommendations will be presented to Prime Minister Shaukat Aziz the same after noon for approval of the new prices.

Two factors-the international prices as low as $52 a barrel and the date of hearing by the Supreme Court of Pakistan in a petition, questioning the government policy of jacking up the petroleum prices-have left no option with the authorities.

Except to reduce the rates to give at least some relief to the consumers.

The Supreme Court of Pakistan is taking up the case on January 16. In its pervious hearing, the apex court directed the ministry of petroleum to give a written reply as to why the government was not passing on the benefit of lowering prices of the petroleum products to the people.

Secondly, the prices as low as $52 a barrel would make difficult for the government to defend its policy of capping petroleum products' prices at the current level for another fortnight.

It's a declared government policy to keep prices at the existing level despite substantial reduction in petroleum prices in the international market.

The officials have made repeated public statements that by jacking up the petroleum prices the government was making up loss in revenue it had incurred by not passing on exact impact to the consumers when international market was as high as $70and $72 a barrel.

Copyright Business Recorder, 2007