Petroleum prices to stay unchanged

ISLAMABAD: Petroleum prices will remain unchanged for the month of July as the government has made adjustments in tax rates, according to an official announcement.

The decision was taken to provide relief to the consumers, said a statement issued by the finance ministry. It said the government had decided not to increase the prices of petroleum products for July 2019.

However, the Federal Board of Revenue (FBR) earlier during the day issued a notification increasing the General Sales Tax (GST) on petrol and high-speed diesel (HSD) from 13pc to 17pc to absorb requirement for a price cut.

The crude price in the international market had come down from April’s $72 per barrel to $64 per barrel on June 28.

Based on standard 17pc GST rate (instead of 13pc notified rate for HSD and petrol), the Oil & Gas Regulatory Authority (Ogra) had recommended about 77 paisa per litre reduction in the price of petrol (motor spirit) and Rs2.94 per litre cut in kerosene price. It also proposed increase of Rs2.30 per litre and 26 paisa per litre in the rates of HSD and Light Diesel Oil (LDO), respectively.

With this arrangement, the existing rates of HSD, LDO, petrol and kerosene oil will remain at Rs126.82, Rs88.62, Rs112.68 and Rs98.46 per litre, respectively.

Besides the GST, the government has also been charging petroleum levy ranging between Rs14 and Rs18 per litre on petrol and HSD and Rs3 and Rs6 per litre on kerosene and LDO.

Petrol and HSD are two major products that generate most of the revenue for the government because of their massive and yet growing consumption in the country. The total HSD sales are touching 800,000 tonnes per month against the monthly consumption of around 700,000 tonnes of petrol, while the sales of kerosene oil and LDO are generally less than 10,000 tonnes per month.

The petroleum prices have been on the rise since early 2017 except for a couple of times when they were reduced.

The government has also notified increase in electricity and gas rates by 12 and 25pc respectively to become effective today (July 1).