OGRA recommends up to 13.5% reduction in POL prices for the first month of 2019
ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has recommended a reduction in the prices of petroleum products by up to 13.5 per cent for the month of January, 2019.
The regulatory authority has suggested that prices of petrol may be reduced by Rs9.50 per litre (10 per cent), high speed diesel (HSD) by Rs15 per litre (13.5 per cent), kerosene oil by Rs0.25 and light diesel oil (LDO) by Rs2 per litre for the next month.
Ogra on Friday forwarded the summary to the Ministry of Energy and Petroleum Division that recommended downward revision in oil prices.
If the government accepts this recommendation, then petrol price would go down from the existing Rs95.83/litre to 86.33 a litre, LDO price will go down from existing Rs77.44 to Rs 75.44 per litre, HSD price will come down to Rs95.94 per litre from the existing Rs110.94 a litre and kerosene price will be reduced to Rs 83.25 from the existing price of Rs83.50 per litre.
The final decision on the Ogra’s recommendation will be taken by the government on Monday.
The regulatory authority recommended the reduction in prices of petroleum products by calculating them at 17 per cent of the general sales tax (GST).
For current month, the Federal Board of Revenue (FBR) increased sales tax on diesel from 12 per cent to 13 per cent while for petrol it was increased from 4.5 per cent to 8 per cent. However, the sales tax on petrol is still low as compared to the standard rate of sales tax which is 17 per cent.
The regulator’s recommendation comes in the wake of drop in crude oil prices the international market. Oil prices dipped below $50 a barrel in November. The average for the month was $65/b. Experts believed higher US supplies would flood the market at the same time slowing global growth would cut into demand. Saudi Arabia and Russia had also produced oil at record levels.
On December 7, OPEC agreed to cut 1.2 million barrels per day from the October levels. Members would cut 800,000 barrels per day and allies would cut 400,000 bpd. Cuts would continue for six months. OPEC’s goal is to return prices to $70 a barrel by early fall 2019.
The price drop occurred just two months after global oil prices hit a four-year high of $81.20/b on September 24, 2018.