The government on Friday reduced petrol price by Rs 2.73 per litre bringing down the commodity price from Rs 112.76 to Rs 110.03 per litre, while keeping prices of the remaining petroleum products unchanged. The Oil and Gas Regulatory Authority (Ogra) had recommended the government to reduce petrol price by Rs 3.44 per litre and High Octane Blending Component by Rs 3.02 per litre.
The ministry of finance, while ignoring the Ogra recommendation, approved a reduction of Rs 2.73 per litre in petrol price and kept the HOBC price unchanged due to increase in Petroleum Levy. The finance ministry with the approval of the Prime Minister has kept the prices of High Speed Diesel (HSD), Kerosene Oil (KO) and Light Diesel Oil (LDO) unchanged approving a subsidy of Rs 0.003 per litre on HSD, Rs 0.49 on KO per litre and Rs 0.31 per litre on LDO.
After the current changes in the petroleum products prices from March 1, 2014 (Saturday), different petroleum products will be available at the following rates: Petrol Rs 110.03 per litre, HOBC Rs 141.23 per litre, KO Rs 106.76 per litre, HSD Rs 116.75 per litre and LDO Rs 100.22 per litre. The government nominally increased the price of jet fuel JP-1, ie, by Re 0.23 per litre from Rs 95.27 to Rs 95.50 per litre.
According to petroleum ministry officials, the government during past three months massively slashed Petroleum Levy on all the products to protect the consumers from the impact of petrol price increase. The government suffered Rs 18 billion losses during first seven months of the current fiscal year 2013-14 on account of Petroleum Levy collection and so far amassed Rs 52 billion against Rs 70 billion.
According to a petroleum ministry official, the government in federal budget 2013-14 had set a target of Rs 120 billion to be collected on account of PL or Rs 10 billion per month, but during past seven months the government collected only Rs 52 billion which is Rs 18 billion short of the target.