ISLAMABAD (November 16 2002) : The government on Friday cut down petroleum products prices by 1.5 percent to 8.6 percent to pass on benefit of their lowering down prices in the international market to the consumers. Minister for Petroleum and Natural Resources, Usman Amin-ud-Din, announced the reduction here at a hurriedly called press conference. The new prices will be implemented with effect from November 16.
Maximum reduction, Rs 3 per litre, was done in MS prices. Its new price would be Rs 32.10 per litre against earlier Rs 35.21. HOBC price is fixed at Rs 36.05 per litre against Rs 39.70 per litre, SKO 18.95 against Rs 19.23, HSD Rs 21.38 against Rs 21.98, LSD Rs 16.64 against Rs 17.88, JP-1 Rs 12.83 against Rs 13.49 and JP-4 Rs 16.02 against Rs 17.07.
The Minister termed the reduction as a major development and a positive outcome of deregulation policy of petroleum sector. He said while introducing policy of deregualtion last year the government had promised to the nation that benefit of lowering down in the international market will be passed on to the consumers outrightly and current reduction was its practical proof.
He observed that the government collects a fixed tax of Rs 16.02 from one-litre petrol to bridge Rs 45 billion deficit through petroleum sector in the annual budget. He claimed that this tax had been at the same level during the last three year and it does not play any role in fluctuation of petroleum products prices. The Minister maintained that the international prices were a sole reason of fluctuation.
Usman gave a break-up of Pakistan's prices vis-à-vis India, Bangladesh and Sri Lanka which showed Pakistan's prices were slightly lower to other majority countries of the region.
The minister told a questioner that the government was consciously following a policy of rationalising diesel prices to make the people feel its difference for conversion to CNG. The Minister was convinced that this switch over would help Pakistan to cut down its petroleum products import bill considerably.
Usman dispelled the impression that oil companies were not following the formula of international prices in its letter and spirit and make undue profit saying any such tactics can not favour the companies as they have a fixed margin of profit in the new system.
The minister added that the government has granted concessions in terms of taxes and duties to the CNG industry so that it could facilitate more number of vehicles. He counted several other measures meant to boost up this industry in Pakistan. These included conversion of buses and other big vehicles from diesel to CNG.
Usman disagreed to a questioner who reminded him that the government was pushing up gas prices irrationally, which was causing problems to the consumers. The Minister said gas prices may rise with its production from other than Sui fields but yet these were lower than all other countries in the region. He said the government policy of capping gas prices has worked well otherwise its prices would have gone much higher by this time. He said the changing of formula of gas evaluation to BTU system was in the favour of all the stakeholders.
The Minister further said the government had taken several decision to do away with the menace of oil smuggling which was a chronic disease and causing loss of Rs 4 to 5 billion to the national exchequer per annum. He directed oil companies to launch public awareness scheme to educate the people that smuggled petroleum products in particular lubricants were of inferior quality and their use was causing irreparable loss to their vehicles.