Petrol prices slashed by Rs 15

The federal government has announced to reduce the prices of all petroleum products by Rs 15 per litre for three months, which will have a revenue impact of Rs 70 billion.
In a statement, Ministry of Finance says that in a major effort to address the crisis resultant of COVID-19, Prime Minister Imran Khan approved on Tuesday a reduction of Rs 15 per litre in the prices of all petroleum products-petrol, high-speed diesel (HSD), kerosene oil, and light diesel oil (LDO).
Lowering petroleum prices by Rs 15 per litre will have an economic impact of Rs 70 billion on the national exchequer, according to the Ministry of Finance.
The new price of petrol is Rs96.60 per litre after decreasing from Rs 111.60 per litre. The price of HSD has also been reduced to Rs 107.26 per litre from Rs 122.26 per lire.
The price of SKO has been reduced to Rs 77.45 per litre from Rs92.45 per litre.
The price of LDO has been slashed to Rs 69.51 per litre from Rs84.51 per litre.
A 13.5 percent decrease has been recorded on the per litre petrol price, 12.3 percent reduction on HSD prices, 5.5 percent on SKO, and 17.82 percent on LDO prices.
The FBR sources said that the decrease in petroleum prices would also have negative impact on sales tax collection of the Federal Board of Revenue (FBR) during 2019-2020.
Despite no change in standard rate of 17 percent sales tax on POL products, the sales tax calculated on per liter basis by OGRA would be decreased due to reduction in prices of POL products.
Nadeem Babar, Special Assistant to the Prime Minister for Petroleum linked the reduction in the prices of petroleum products with prevailing global oil prices. He said that the government has already reduced the PL by Rs 15 per litre and PL would further be reduced in coming months, if oil prices in international market continue to drop.
There is lag impact of 45 days on prices of imported petroleum products in domestic price calculation, he added. The crude prices have fallen from $60.22/bbl in February 2020, to $22.90/bbl in recent days. The government jacked up the PL on POL products in March for collecting at Rs 5 billion additional revenue through consumption of two major products petrol and HSD.
In current month (March), the PL on HSD was raised by Rs 7.03 to Rs 25.05 per litre from Rs 18 per litre in February. The levy on petrol was increased by Rs 4.75 to Rs 19.75 from Rs 15 per litre, an increase of over 30 percent.
The levy on kerosene oil was raised by Rs 6.33 from Rs 6 to Rs 12.33, showing an increase of over 100 percent. However, petroleum levy on LDO was reduced from Rs 6 per litre to Rs 4.92 per litre. The government collected Rs 138 billion under petroleum levy (PL) in first six months (July-December 2019) against Rs 216 billion budgeted for financial year 2019-2020.