Based on the exiting tax rate, Oil and Gas Regulatory Authority (Ogra) Friday recommended reduction of Rs 5.26 per liter in the rate of motor gasoline (petrol) for the month of April 2018. According to a working paper moved to Ministry of Energy (Petroleum Division) and Ministry of Finance, the Ogra has recommended reduction of up to 0.8 percent in the rates of different petroleum products.
In the working paper, the Oil and Gas Regulatory Authority recommended reduction of Rs 5.26 per liter or 6.0 percent in price of petrol and Rs 0.65 per liter or 0.7 percent increase in the price of high speed diesel (HSD). High speed diesel is widely used in transport and agriculture sector and, therefore, increase in its price would increase the input cost of farmers.
The regulator also proposed an increase of Rs 0.13 per liter in the price of superior kerosene oil (SKO) and Rs 0.56 per liter in the price of light diesel oil (LDO), which meant a hike of 0.2 percent and 0.8 percent per liter respectively.
The Ogra has sent a summary to the Ministry of Energy (Petroleum Division). Petroleum Division would then forward it to the Finance Ministry and Prime Minister Office for final decision. The government will decide and announce its decision on the prices on Saturday (today).
If the government approves the recommendation, petrol price will go down to Rs 82.81 per liter from the current Rs 88.07 and diesel price will jump up to Rs 99.10 per liter from current level of Rs 98.45. The prices of SKO will slightly go up to Rs 76.59 per liter from the existing Rs 76.46 and the LDO will go up to Rs 65.85 from existing Rs 65.30 per liter.
Against the standard rate of 17 percent general sales tax (GST), currently the government is charging 31 percent GST on high speed diesel (HSD) and 17 per cent on other petroleum products including petrol, kerosene oil and LDO. In addition to GST, the government was charging highest rates of Petroleum Development Levy (PDL) from the consumers.
When the prices were increased in the last month, various commerce and business bodies criticized the price hike. The high speed diesel is a common fuel for all the transporting vehicles, and the government is of the opinion that increasing the price of diesel will also increase the rates of household products.
The Ogra forwarded its working paper to the government on the basis of existing tax rates under instructions from the finance minister. The government has estimated to collect revenue of Rs 160 billion from petroleum levy on all petroleum products in budget 2017-18. The government is charging Rs 10.00 petroleum levy on petrol. It is also charging Rs 8.00 per liter petroleum levy on HSD, Rs 6 on SKO and Rs 3 on per liter LDO.