Despite decreasing trend in international oil prices, the government is still unable to decrease POL prices, as it is subsidising these products.
The government is under immense pressure to decrease POL prices for domestic consumers, but it is impossible for the government to do it, as it is picking up subsidy on kerosene, light diesel and high diesel oils, official sources told Business Recorder on Tuesday.
The reduction in international oil prices has been utilised to adjust the petroleum differential claims (PDC) and subsidy on the said POL products, the official said, adding that even after the adjustment, there is still PDC on the products.
"The government has been picking up Rs 2.49 per litre on kerosene, Rs 0.59 on HSD and Rs 1.41 on LDO till September 30, 2006 against the subsidy of Rs 8.94 per litre on kerosene, Rs 5.67 on HSD and Rs 8.06 on LDO since May 2004," they said.
The government has collected Rs 47 billion from May 2004 as Petroleum Development Levy (PDL) on kerosene, LDO and HSD, while currently it is zero on the said products and they are mostly consumed in agriculture and transport sectors, they said.
However, the government has so far picked up Rs 82 billion as subsidy on POL products, they added. Of the total petroleum differential claims of Rs 47.6 billion owed to oil marketing companies (OMCs) by the Ministry from May 2004 up to September 2006, the government had only reimbursed Rs 24.9 billion and there are arrears of Rs 22.7 billion to the OMCs, the added.
Oil prices in the Gulf region showed an increased of 53 to 83 percent from May 2004 to September 2006 while in the domestic prices it was observed an increase of 49 to 59 percent and the gap was picked up by the government.
POL prices in India are higher when compared with Pakistan. The petroleum prices in terms of dollars in Pakistan are $0.95 per litre while in India it is $1.11 per litre, which is 16 percent higher. Similarly, the diesel price in Pakistan is $0.64 per litre while in India it is $0.78 per litre and it is also 22 percent higher than Pakistan.