ISLAMABAD, Oct 14: The government on Sunday reduced prices of petrol and compressed natural gas (CNG) by about two per cent and increased prices of all other petroleum products by up to 2.24 per cent for a week, passing on the impact of prices in international markets to consumers.

A reduction of 1.99 per cent was made in the prices of petrol and CNG. As a result, the price of petrol (motor spirit) declined by Rs2.09 per litre to Rs103.40 per litre from Rs105.49.

In line with a decision to keep the price of CNG at 40 per cent less than that of petrol, the CNG rate was cut by Rs1.92 per kg (1.99 per cent) to Rs94.65 per kg from 96.57 per kg for Zone-I (comprising Balochistan, Khyber Pakhtunkhwa and Potohar) and by Rs1.74 per kg to Rs86.48 per kg from existing rate of Rs88.22 per kg for Zone-II (Sindh and Punjab).

Increase in prices

The ex-depot price of kerosene oil was increased by Rs1.92 per litre (1.88 per cent) to Rs103.87 from existing rate of Rs101.97 per litre. Similarly, the price of Light Diesel Oil (LDO) was increased by Rs1.23 per litre (1.27 per cent) to Rs97.93 per litre from existing rate of Rs96.70.

The price of High Speed Diesel — mostly used to run heavy vehicles, electricity generators and agriculture tube wells — was also increased by Rs3.16 per litre (2.86 per cent) to Rs113.62 per litre from existing price of Rs110.46 per litre.

The price of High Octane Blending Component (HOBC) was increased by an average of 2.27 per cent. The HOBC price was fixed at Rs134.70 per litre for Rawalpindi-Islamabad region against its existing price of Rs131.75 per litre, an increase of Rs2.95 per litre (2.24 per cent). The HOBC would be cheaper by Rs2 per litre in Multan and Lahore and about Rs4 per litre costlier in Karachi and adjoining areas.

Over and above the landed cost of imported products and commission for retailers and marketing companies, the government is charging the maximum petroleum levy permissible under the finance bill, at the rate of Rs10 per litre for petrol, Rs14 for HOBC, Rs6 for kerosene and Rs8 for HSD. In addition, the government collects 16 per cent GST on all products.

NA resolution

A petroleum ministry official told Dawn that the weekly price revision mechanism would continue for at least two more weeks, despite a unanimous resolution of the National Assembly that called for monthly price reviews.

He said the decision to revise oil prices on a weekly basis was taken by the Economic Coordination Committee of the cabinet on an experimental basis for three months and that the ECC or the federal cabinet would revisit the matter soon.

“What I can say with confidence is that prices will be revised on a weekly basis for another two weeks,” he remarked.

Answering a question about the National Assembly’s unanimous resolution, the official said that even if it decided to enforce it the government would not be reviewing the prices immediately but rather on the first day of next month.

The official said that Prime Minister’s Adviser on Petroleum and Natural Resources Dr Asim Hussain and his team wanted to move out of the pricing mechanism by allowing the oil marketing companies to fix the prices independently, on the basis of their imports whenever product shipments reached Karachi.

“We want full implementation of the report of Justice Bhagwandas Commission that required complete deregulation of petroleum products and their pricing,” the official said, adding that the petroleum ministry would push for allowing the OMCs to independently fix product prices without consulting the ministries of petroleum and finance when the National Assembly’s resolution would be brought before the ECC later this month.

On Friday last, the lower house of parliament unanimously passed a PML-N-sponsored resolution demanding that prices be reviewed once a month, instead of once a week. The resolution condemned the frequent price increases which it said were causing “immense misery and suffering to the common man”, adversely affecting the industrial, agriculture and transport sectors and bringing the economy to the brink of collapse.