Prime Minister Yousaf Raza Gilani on Thursday approved 2.5 percent reduction in three major petroleum products including petrol, high speed diesel (HSD) and HOBC following the directions of Supreme Court. The price of petrol (motor gasoline) has been reduced by Rs 1.45 to Rs 56.21 per litre, the price of HOCB by Rs 1.80 to Rs 70.28 per litre and high speed diesel (HSD) has been reduced by Rs 1.47 to Rs 55.67 per litre.
The decision has been taken after the consultation of Petroleum Ministry and Finance Ministry. Petroleum Ministry had proposed 5 percent reduction in prices of petroleum products but Finance Ministry showed reluctance as it had committed to International Monetary Fund (IMF) to meet the revenue target through the collection of Petroleum Development Levy (PDL).
Finance ministry was reluctant to reduce the oil prices in the country as PDL has been one of the key sources of revenue for the government because collection from the main tax paying sectors was on the decline due to economic recession.
Sources said that after the current reduction, the government collections in terms of PDL would further drop between Rs 1.25 billion to Rs 1.50 billion. Government had earlier projected 14 billion PDL for the month of May that was less against PDL collection in earlier months due to slight increase in prices in global market. Now the government would also facing reduction by around Rs 1.5 billion in PDL collection after the recent reduction in oil prices, sources said.
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