The government on Wednesday slashed prices of petroleum products by up to Rs 3 per litre effective from April 1, 2021.
The government reduced the price of high speed diesel (HSD) by Rs 3 per litre, petrol by Rs 1.55 per litre, kerosene oil by Rs 1.55 per litre and light diesel oil (LDO) by Rs 1.56 per litre.
Following the government’s decision to cut prices, the price of petrol has come down to Rs 110.25 from Rs 111.90 per litre, with a reduction of Rs 1.55 per litre. The price of high-speed diesel now stands at Rs 113.08 against Rs 116.08 per litre previously. The price of kerosene oil has been slashed to Rs 82.06 from Rs 83.61 per litre. It is used in remote areas for cooking purposes where liquefied petroleum gas (LPG) is not available. The price of light diesel oil has come down to Rs 79.86 against Rs 81.42 per litre, a reduction of Rs 1.56. It is used by the industry.
The government had increased prices of petroleum products over the past several months. Now, the prices have been reduced for the fortnight from April 1 to 15, 2021. High-speed diesel is widely used in transport and agriculture sectors. Therefore, the reduction in its price will have a positive impact and ease inflationary pressure.
The government reduced the prices following recommendations of the Oil and Gas Regulatory Authority (OGRA). The prime minister decided to cut prices despite opposition from the Finance Division, which wanted to adjust the price reduction by increasing the rate of petroleum levy to fetch more revenue from the consumers.
Ogra determines ex-depot prices of petroleum products on the basis of petroleum levy and general sales tax.
In the second half of March, the federal government raised ex-refinery prices by reducing the petroleum levy on petroleum products. These petroleum products are a major source of revenue for the government. The government is currently collecting two types of taxes on petroleum products. It collects petroleum levy in addition to receiving general sales tax.
