The government is likely to decrease petroleum product prices by up to Rs 2 per litre in line with the international POL price trend and new prices would be effective from September 1. Sources, however, said that petroleum product prices would be finalised after taking into account average global crude prices for the entire month of July and the inland freight equalisation margin (IFEM).
According to calculations by Oil and Gas Regulatory Authority (Ogra), based on average global crude prices on August 24, high-speed diesel (HSD) price is expected to decrease by Rs 2 per litre, petrol by Re 1 per litre, light diesel oil by Rs 2 per litre, kerosene oil by Rs 2 per litre, Jet-4 by Rs 2.15 per litre and Jet-8 by Re 1 per litre. These prices do not include IFEM.
Sources said that Ogra has prepared the summary on the basis of international POL price trend, which would be sent to the Ministry of Finance on Thursday (today) for final approval and would be announced on August 31. The government has deregulated prices of motor spirit, high octane blending component (HOBC), light diesel oil, JP-1, JP-4 and JP-8 from June 1. Refineries and oil marketing companies are allowed to fix prices of these products on a monthly basis keeping in view the import parity price. However, Ogra still announces prices of these products after consultation with refineries and marketing companies taking their recommendations into consideration.
The government has not yet deregulated IFEM, which will result in different prices across the country, contrary to the current uniform rates. Sources maintain that the government may find it challenging to deregulate IFEM as opposition to this move is expected from different political parties.