Fri. Mar 1st, 2024

Government Slashes Petrol Price by Rs8 per Litre for Fortnight, Aligning with Oil and Gas Regulatory Authority’s Recommendation

Petroleum In a recent notification, the Finance Division announced a substantial reduction of Rs8 per litre in petrol prices for the fortnight starting January 16. The decision, in line with the guidance from the Oil and Gas Regulatory Authority, brings the ex-depot price down to Rs259.34 per litre from the previous rate of Rs267.34 per litre. The announcement indicated no adjustments for high-speed diesel, light-diesel oil, and kerosene oil.

The government has successfully implemented a Rs60 per litre petroleum levy, the statutory maximum, on both petrol and High-Speed Diesel (HSD). With a budget target of Rs869 billion set for petroleum levy collection in the current fiscal year, as per commitments to the International Monetary Fund (IMF), expectations are to surpass Rs950 billion by June.

Petroleum and electricity prices continue to be significant contributors to inflation, registering at 29.7% in December, as measured by the Consumer Price Index. Presently, the government imposes approximately Rs82 per litre in taxes on both petrol and HSD.

While the general sales tax on all petroleum products remains at zero, the government enforces a Rs60 per litter petroleum development levy on petrol and Rs50 each on HSD, high-octane blending component, and 95 research octane number (RON) petrol.

Government Implements Substantial Rs8 per Litre Reduction in Petrol Prices Following Oil and Gas Regulatory Authority’s Guidance

Introduction:

In a recent notification, the Finance Division of the government has announced a notable decrease of Rs8 per litre in petrol prices, effective for the fortnight starting January 16. This strategic decision aligns with the recommendations put forth by the Oil and Gas Regulatory Authority, aiming to address economic considerations and ensure consumer relief

Key Details:

The ex-depot price of petrol, as per the announcement, has been adjusted to Rs259.34 per litre, marking a significant drop from the previous rate of Rs267.34 per litre. Interestingly, there were no amendments mentioned for high-speed diesel, light-diesel oil, and kerosene oil, maintaining stability in those sectors.

Government’s Fiscal Strategy:

Successfully enforcing a Rs60 per litre petroleum levy—the statutory maximum—on both petrol and High-Speed Diesel (HSD), the government aims to meet its budget target of Rs869 billion for petroleum levy collection in the ongoing fiscal year. This commitment is in accordance with agreements made with the International Monetary Fund (IMF), and there are optimistic projections to exceed Rs950 billion by June.

Inflation Impact:

The reduction in petroleum prices comes at a crucial time, as petroleum and electricity prices have been significant contributors to inflation. In December, inflation stood at 29.7%, as measured by the Consumer Price Index. The government presently imposes approximately Rs82 per litre in taxes on both petrol and HSD.

Taxation Structure:

While the general sales tax on all petroleum products remains at zero, the government enforces specific levies to support fiscal objectives. A Rs60 per litre petroleum development levy is applied to petrol, along with Rs50 each on HSD, high-octane blending component, and 95 research octane number (RON) petrol.

This comprehensive approach by the government reflects a balanced strategy to manage fuel prices, taxation, and economic stability, ultimately benefiting consumers and contributing to broader fiscal goals.

By ashraf

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