The government on Thursday announced that it had slashed petrol prices for May owing to sharp decline in crude oil prices in the international market.
The price of petrol has been brought down to Rs81.58 after a reduction of Rs15, meanwhile the rate of high-speed diesel has been slashed by Rs27.15 and reduced to Rs80.10.
According to the notification, kerosene oil and light diesel will now be sold at Rs47.44 and Rs47.51 after a reduction of Rs30.01 and Rs15 in their prices respectively.
The new prices will be effective starting midnight, the notification said.
On Wednesday, the Oil and Gas Regulatory Authority (Ogra) had recommended to the government to reduce petroleum prices by up to Rs44 per litre for May 2020.
The regulatory body had suggested that the price of diesel may be reduced by Rs33.94 per litre (or 31.6%), petrol by Rs20.68/ litre (21.4%), kerosene oil by Rs44.07/ litre (56.9%) and light diesel oil (LDO) by Rs24.57/ litre (39.3%).
It is worth mentioning that the government is also charging 17% general sales tax (GST) on all petroleum products. Aside from it, the government is also collecting petroleum levy (PL) on these products, which is directly taken from consumers.
The government, in order to meet the revenue shortfall for March 2020, had increased the petroleum levy (PL) on these products. The PL on diesel was increased by 7.05 to Rs25.05 per litre.
Noted economist Dr Kaiser Bengali, however, has opposed the move to cut the POL prices in the country.
“Domestic fuel prices must NOT be reduced, surplus must be used to: (1) liquidate circular debt, it will stabilize fiscal base n (2) lower GST Goods rate, it will boost industry n employment,” Bengali said in a statement on Thursday.