The prices of petroleum products are likely to reduce up to Rs 4.5 per litre from January 1, 2016, it is learnt. Reliable sources in the Ministry of Petroleum and Oil and Gas Regulatory Authority (OGRA) told this scribe that keeping in view the fluctuation of international crude oil prices during November and December, the prices of petrol in local market is to be reduced by Rs 1.54 per litre while prices of High Octane Blending Component (HOBC) is to be reduced by Rs 4.5 per litre.
They said that if the government did not increase General Sales tax (GST) on petroleum products from January 1, the prices of High Speed Diesel (HSD) is likely to be reduced by Rs 2.60 per litre, Kerosene Oil (KO) by Rs 3.70 per litre and Light Diesel Oil by Rs 3.45 per litre.
According to officials, the regulator after calculating the oil imports of the current month on December 29, 2015 will send a summary to the Ministry of Petroleum and Ministry of Finance. According to experts, oil prices in international markets are witnessing a continued decline as a result of American government's decision of lifting ban on export of crude oil and decision of the Organisation of Petroleum Exporting Countries (Opec) to not reduce oil supplies.
They said Iran's return to the oil market is also the reason for reduction in prices. Sanctions against Iran could be lifted as early as January 2016 and all these developments resulted in bringing international oil prices to the lowest level of past 11 years, they added.
"If the Finance Ministry did not make any change in the GST, the aforementioned impact will come in local oil prices and in case the Finance Ministry makes an upward change in GST the impact will not be so much", sources said. At present different petroleum products are being sold on following prices in local market: HOBC at Rs 79.79 per litre, petrol at Rs 76.26 per litre, High Speed Diesel at Rs 83.79 per litre, Light Speed Diesel at Rs 53.59 per litre and Kerosene Oil at Rs 57.11 per litre. The current consumption of petrol in Pakistan has touched 430,000 barrels per month which one year ago was around 330,000 barrels per month. The upward consumption of petrol has increased the tax collections.