The government is keen to maintain current petrol prices in the upcoming month of September 2017; credible sources report. Though reports are highly inclining towards this statement; Pakistan’s regulatory authority (OGRA) has yet to forward its routine summary to the relevant ministry in order to review the prices of petroleum products.
It is pertinent to mention that a report unveiled the substantial profit making by Pakistani government by the sale-purchase of petrol. More specifically, the government is selling petrol to the public with 60% profit yield. However, one school of thought argues that the sale of petroleum product is a major source of revenue generation for the government; thus the imposition of sales tax on them. Considering the tumultuous political climate of Pakistan in August, the government approved only half of the price reduction proposed by the regulator for both, High-Speed Diesel and Petrol.
August – A month of tense situations or a rip-off?
Unlike the customary practice for the announcement of new (petroleum products’) tariff on 1st, things took a different turn amidst the political turmoil. As coined by many analysts, the state affairs suffered a ‘limbo’ in the wake of Premiere’s departure. However, a quick replacement at the Prime Minister’s office and the subsequent selection of new cabinet saw the approval of only half the price tariff proposed by the regulator (OGRA) for petrol and high-speed diesel. The remaining is being absorbed by the increase in sales tax on petrol and high-speed diesel.
On July 31, in a brusque statement, the Finance Division spokesperson highlighted that prices of petroleum products would be kept unchanged until a decision was taken by the competent authority. And once the new prime minister and cabinet took charge, the respective authorities cut the prices of petrol and diesel. The tariff for the month of August is:
- Petrol Rs 69.50/L
- High-Speed Diesel Rs 77.40/L
- Kerosene Oil Rs 44/L
- Light Speed Diesel Rs 44/L
The thing to note here is the summary sent by OGRA (Oil and Gas Authority) to the concerned ministries. The regulator had proposed that prices for petrol and high-speed diesel should be slashed from August. Following is the suggested tariff by OGRA for August 2017:
- Petrol Rs 67.63/L
- High-Speed Diesel Rs 74.83/L
- Kerosene Oil Rs 57/L
- Light Speed Diesel Rs 54.01/L
As per the regulator’s summary, the price of high-speed diesel was supposed to be cut by Rs5.07 per litre and was highlighted to contribute a favourable effect on the rate of inflation. Petrol price was recommended to be slashed by Rs 3.67. The highlight of this summary by far was the suggested increase in Kerosene Oil and light speed diesel oil, Rs 13/L & Rs 10.01/L respectively. The prices of (Kerosene Oil & Light Speed Diesel) was maintained at Rs 44/L.
It is difficult to pinpoint any conclusion without considering OGRA’s summary to relevant authorities and their remarks on it; both of which have yet to happen. Until government announces, the petroleum products will continue to be sold on the existing tariff till 31st August.
