APBF disappointed as OGRA advice of 6% oil rate cut rejected
(LAHORE: April 02nd, 2018) –The All Pakistan Business Forum (APBF) president Ibrahim Qureshi has expressed its serious concern for not passing on full relief to the public of oil price cut in global market as the government rejected the OGRA’s recommendation of reducing petrol rate by Rs5.26, slashing the price by just Rs2 per liter.
He said that the OGRA had recommended in a summary to the government that the price of petrol be reduced by Rs5.26 per litre (6%), which could bring the rate down from Rs88 to Rs82 per litre. But the government unfortunately has reduced the prices of petrol and diesel by Rs2 per litre for the month of April 2018. It has maintained the prices of kerosene oil and LDO at the same level as in the month of March instead of announcing any decline in their rates.
He said that the domestic petroleum product prices in the country remained fluctuated upward and downward due to international oil pricing trend during the tenure of the present government and it failed to provide relief of reduction of the prices to the consumers and always tried to gain maximum benefit of the changes of these prices.
Ibrahim Qureshi said that the prices at the international level keep fluctuating in the last couple of years due to disturbance in the oil-producing countries and converting from oil to the other alternative sources of energy but the government in Pakistan only passed on hike in rates. Whenever prices came down the full benefit was not passed on to the public.
At present, two types of taxes are being charged from consumers — petroleum levy and general sales tax. The government is charging higher rate of general sales tax at 31% on high-speed diesel, which is widely used in agriculture and transport sectors, while 17% is being charged on other petroleum products. In addition, the government is charging Rs8 per litre petroleum levy on HSD, Rs10 per litre on petrol, Rs6 per litre on light diesel oil (LDO) and Rs3 per litre on kerosene oil.
Ibrahim Qureshi said that petroleum products rates were raised by over Rs19 per litre during last seven months consecutively on the recommendations of the regulators blindly but when it suggested the reduction it was not implemented fully.
He said that back in August 2017, the Oil and Gas Regulatory Authority had recommended the government to reduce the prices of petrol and high speed diesel by Rs 3.67 and Rs 5.07 per litre respectively for the month of August but the govt maintained the rates at previous level, instead of passing on benefit to the public.
In the past too, the government did not pass on the full benefit of declining oil prices to the public by imposing heavy taxes.