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Petroleum prices reduced by Rs5 per litre

31 January, 2016

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ISLAMABAD / LAHORE: The government announced a reduction in prices of petroleum products by Rs5 per litre on Saturday.

Petrol will be available at Rs71.25 per litre and high speed diesel at Rs75.79 from Feb 1, according to a notification.

Instead of passing on full benefit to the consumer of reduced oil prices in the international market, the government decided to amend the sales tax collection mechanism to stop about Rs5 from going to them.

The government will still bag Rs25 in terms of taxes and levies on every litre of petrol.

According to the notification, a fixed sales tax of Rs14.58 per litre has been imposed on petrol. Earlier the rate was 20 per cent of the petrol price, or Rs10-12 per litre.

Similarly, the government has fixed the sales tax at Rs29.57 per litre on high speed diesel (HSD). Earlier it was 34pc, or around Rs12-15 per litre.

HSD is the largest selling petroleum fuel in the country because it is consumed in heavy vehicles and generators.

The government will now receive Rs38 per litre on HSD in terms of taxes and levies.

Apart from fixing the sales tax amount instead of collections based on percentage, the government has ensured maximum collections from petroleum products.

Sates tax of Rs18.57 per litre has been imposed on HOBC, Rs10.40 on kerosene and Rs9.63 per litre on light diesel oil (LDO) in the amended notification.

The new price of HOBC is Rs75.66 per litre, kerosene Rs43.25 and LDO Rs39.94.

Prime Minister Nawaz Sharif said in Lahore that prices of petrol and diesel had been further reduced by Rs5 per litre.

Talking to jounalists, the prime minister told newsmen “Inflation rate has also fallen below two per cent.”

He said economic performance of Pakistan had been acknowledged by world institutions and its foreign reserves had gone up to $21 billion.

Mr Sharif claimed that the benefits of economic policies had started reaching people. With the decrease in rates of petroleum products, he said, the prices of other daily-use items would come down. He said the country had been put on the path of peace, progress and prosperity.

The prime minister said the government took aggressive steps to significantly reduce power outages that helped revive the functioning of industry.

Finance Minister Ishaq Dar said in a statement that “the prices announced for the month of February are another manifestation of the government’s resolve to provide maximum facilitation to the general public”.

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