Prices of petroleum products may decrease in December

Prices of all petroleum products are likely to decrease in December 2019 in line with fluctuations in global crude oil prices. The Oil and Gas Regulatory Authority (OGRA) recommended the government on Friday to reduce the prices of Motor Spirit (MS), High Speed Diesel (HSD), Kerosene Oil and Light Speed Diesel (LDO) in monthly review for December 2019.

The regulatory authority has recommended that the price of MS may be decreased by 25 paisa per liter and the price of HSD by Rs 2.40 per liter. It has further suggested a reduction of 83 paisa per liter in the price of kerosene oil and Rs 2.90 per liter in the price of LDO.

The OGRA has forwarded the summary to the Ministry of Energy (Petroleum Division), which would send it to the Ministry of Finance for approval. The government will decide on the price revision on Saturday (today).

If the government accepts the OGRA's recommendations, the price of petrol will go down from the existing Rs 114.24 per liter to Rs113.99 per liter whereas the price of HSD will reduce to Rs125.01 per liter from the current Rs127.41 per liter.

The price of LDO, which is mainly used for industrial purposes, has been recommended to go down to Rs 82.43 per liter from the current Rs85.33 per liter. Similarly, the price of kerosene oil will likely to fall from Rs97.18 per liter to Rs96.35 per liter.

For both MS and HSD, the suggested per liter price decrease is 0.2 percent and 1.9 percent respectively while the proposed reduction in price of kerosene oil is 0.9 percent and 3.4 percent for LDO.

Kerosene is used for cooking purposes, especially in remote areas where liquefied natural gas (LPG) or pipeline gas is not available.

The regulator has computed the prices of petroleum product at standard rate of General Sales Tax (GST) 17 percent and Petroleum Levy is being charged on the four petroleum products at different rates. The OGRA following the decision of federal government has calculated Rs 18 per liter petroleum levy on HSD, Rs 15 per liter on MS, Rs 6 per liter on kerosene oil and Rs 3 per liter on LDO.

Since July 2019, Pakistan has started receiving monthly oil supplies worth $275 million from Saudi Arabia on deferred payments. Under the arrangement, Pakistan will get the oil credit facility to the tune of $9.9 billion over three years, sources said.