ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) recommended on Friday reduction of up to 21 per cent in prices of petroleum products for the month of February, based on existing tax rates.
In a summary sent to the government, Ogra recommended that price of petrol be reduced by about 10 per cent, of high speed diesel (HSD) by 13.6pc, of kerosene oil by 20.38pc, of light diesel oil (LDO) by 19.6pc and of high octane blending component (HOBC) by 14.4pc if the government wanted the current tax rates to continue.
An official said the prices could be brought down by up to 50pc if the general sales tax rate was reverted to the normal 17pc but the government would want to offset the resultant revenue losses by maintaining GST rates of up to 47pc on some products.
He said the crude and product prices in the international market had declined by around 30pc or about $10 per barrel in the month of January.
However, under instructions from Finance Minister Ishaq Dar, Ogra worked out the prices on the basis of existing tax rates.
Although, the federal ministers for finance and petroleum have promised in their recent public statements that substantial cut in oil prices would be allowed, the exact reductions would be announced on Sunday after approval of prices by the prime minister keeping in view the ongoing talks with the International Monetary Fund.
Based on the existing tax rates and PSO purchases from international market, Ogra worked out a reduction of Rs7.56 per litre (9.9pc) in the ex-depot price of petrol (motor gasoline) for February, and proposed that it should be cut to Rs68.69 per litre from the existing rate of Rs76.25 per litre.
The regulator recommended that the ex-depot price of HSD be cut by 13.6pc or Rs11 per litre to Rs69.79 per litre from Rs80.79.
Ogra also recommended that ex-depot price of kerosene oil be reduced by Rs8.17 per litre (20.38pc) and be fixed at Rs40.08 per litre instead of Rs48.25.
It worked out ex-depot price of light diesel oil at Rs37.58 per litre, down by Rs7.36 or 19.6pc, from Rs44.94 per litre.
Likewise, the regulator calculated the price of high octane blending component at Rs70.51 per litre instead of Rs80.66, with a decrease of Rs10.15 per litre or 14.4pc.
Petrol and high speed diesel are the two products that generate most of the revenue in oil sector.