Petroleum prices may fall by much to Rs5 per liter over the next two weeks if the government accepts the Oil & Gas Regulatory Authority’s (Ogra) projections.
A senior official told that the Ministry of Finance will resist any price cuts to recuperate part of the income loss it permitted earlier this month by lowering tax rates. The finance ministry will make a final judgment on Tuesday.
According to sources in the Petroleum Division, the Ogra working paper on petroleum product prices has been received. The pricing working document is based on the existing fuel charge and general sales tax rates as well as import parity prices.
According to the working paper, the regulator calculated an Rs3.50 per liter drop in the ex-depot price of petrol and an Rs5 per liter reduction in the ex-depot price of high-speed diesel (HSD).
Similarly, the ex-depot price of light diesel and kerosene oil is expected to fall by Rs2 and Rs3 per unit, respectively.
These price reductions were negotiated as a result of reduced worldwide oil prices, despite the fact that the exchange rate had worsened throughout the previous 15 days of August.
The government also charges a nominal tax of Rs2.05 per liter of HSD oil, 24 paise per liter of light diesel, and nil for gasoline and kerosene. This meant that the government was also losing a significant amount of money from a solely federal tax. Until last year, the government imposed a fuel tax of up to Rs30 per liter on gasoline, and Rs6-8 per liter on kerosene and light diesel.
The government maintained the price of gasoline at Rs119.80 per liter and HSD at Rs116.53 per liter till 15 august. It did, however, raise the ex-deposit price of kerosene by 81 paise per liter to Rs88.30. Furthermore, the ex-deposit price of light diesel oil was raised by Rs1.10 per liter to Rs85.77.