It is expected that the prices of petroleum products will decrease substantially for the March month due to around 20% fall in the global oil prices.
There are three different proposals that are currently under discussion as the Dubai Crude rate has been reduced from $62 per barrel on Jan 31 to $50 a barrel on Friday, down 19.35%. However, the benchmark International Brent price went down from $60 a barrel to $51 a barrel down by 18.33%.
The Oil & Gas Regulatory Authority (Ogra) based on the current tax rates calculated around Rs15 per litre reduction in high-speed diesel (HSD) and petrol prices respectively.
However, the Ministry of Finance and Federal Board of Revenue (FBR) are trying their best to cut the prices by half of what is calculated by Ogra and retain the rest of the amount as a windfall by increasing tax rates. FBR and Finance Ministry wants to increase in diesel, petrol taxes to cover up for the revenue losses.
As per an official the finance ministry wishes to make up for the revenue losses that came out of the lower import parity price for crude and petroleum products and the revenue issues it had seen in the first 8 months of the current fiscal year.
Due to higher taxes rates another proposition was to cut the HSD and petrol prices by Rs7.23 and Rs5.79 per litre, respectively. However, it is also important to mention here that on the PM’s directives the PM’s Delivery Unit (PMDU) proposed reducing the HSD price from Rs127 to Rs100 per litre that will reduce it by Rs27 per litre. Also, it has been recommended that for the month of March the petrol prices will be reduced by Rs15 per litre.
Now what we can say for sure is that petroleum product prices will be reduced for the month of March, but the exact number is not known.