Declined prices of POL products: Govt unlikely to pass on full relief due to tax adjustment

ISLAMABAD: The government is unlikely to pass on full relief of declined prices of petroleum products internationally to the public in the second half of December 2021 as it would adjust the taxes to meet the revenue shortfall of the previous months.

Sources said that the Oil and Gas Regulatory Authority (Ogra) had worked out a reduction by Rs 11 per litre in petrol price and the price of high speed diesel (HSD) may be reduced by Rs 9 per litre. Sources said the final price of petroleum products will be announced after the adjustment of tax by the government.

Finance Minister Shaukat Tareen already announced that the government would charge at Rs 4 per litre petroleum levy each month. On December 1, 2021, the Economic Coordination Committee (ECC) approved increase the margins of oil marketing companies (OMCs) and dealers for motor spirit and HSD with effect from December 16, 2021. Under the decision, the dealers’ margins would go up by 25.20 percent and that of the OMCs by 23.32 percent on both products.

That means the dealers would now get Rs 4.90 per litre on petrol instead of Rs 3.91, showing an increase of 99 paisa. In addition, they would get 83 paisa per litre higher commission on the HSD at Rs 4.13 per litre instead of the existing rate of Rs 3.30.

On November 30, the government had announced to maintain the prices of petroleum products for the December 1-15 period in line with Prime Minister Imran Khan’s decision.

The petrol price remained unchanged at Rs 145.82 per litre, and the price of HSD remained at Rs 142.62 per litre. The prices of kerosene oil (SKO) and light diesel oil (LDO) stayed at Rs 116.53 and Rs 114.07 per litre, respectively. The oil price for Brent crude oils in December was $73.09 per barrel, while the price was $81.05 per barrel in November of 2021.

Copyright Business Recorder, 2021