Breakdown of Liter of Oil in Pakistan

“>From: Samreen Khan <samreen.khan.80@googlemail.com>
Date: Apr 27, 2009 11:38 AM
Subject: FACTS RELATING TO OIL PRICES IN PAKISTAN

Summary of important facts relating to the prices of petroleum products in Pakistan 

 

Breakup of current Petrol Prices

  

Formula                                                                                            26.75
Inland Freight                                                                                      01.18
Dealers and OMC Margin                                                                   02.63

Petroleum Development Levy                                                   19.15
Excise Duty                                                                                         00.00
Sales Tax (16% on above)                                                        07.95

 

Petrol per litre                                                                                57.66

 

 

From above, it is clear that around 47% of the petrol prices comprises of taxes and duties and the actual price of petrol is only 53% of the current prices.

 

The same is true for the other five products given in the above table. The extra amount of duty named “PDL” could be easily removed / lowered to give relief to the poor people. It could help reduce inflation in our country substantially.

 

Maximum PDL on petroleum products levied:

The following table shows the maximum PDL levied on the petroleum products:

                                                                                                                                                                               
MOTOR GASOLINE  (PETROL)                                                     29.49                              

Effective December 16, 2008 to December 31, 2008

 

HI-OCTANE                                                        41.57                               

Effective November 1, 2008 to November 15, 2008

 

DIESEL                                                           17.77                        

Effective March 1, 2009

 

LIGHT DIESEL OIL                                                               13.09                              

Effective March 1, 2009 to March 31, 2009

 

KEROSENE OIL                                                               15.89                              

Effective March 1, 2009 to March 31, 2009

 

Previous data for diesel prices could not be found on the internet. Therefore, the latest price for the month of March 2009 has been taken for the purpose of above analysis.

 

Previously, there was a subsidy on Light Diesel Oil and Kerosene Oil, that is mostly used in agricultural areas of Pakistan however, in the last few months the subsidy has been removed and petroleum development levy has been included in the price per litre of these products.

 

This levy can be easily removed or lowered substantially, in order to reduce the prices of agricultural products in Pakistan. As we all know that fuel prices has a direct effect on the prices of food products, therefore, by removing this PDL (an extra duty) we can easily reduce inflation in our country. This is the easiest and most appropriate way of giving relief to the poor. This will have a direct effect on the people of our country.

 

Why is this duty not been abolished when the related PDC has been abolished?

 

Why the benefit of lower oil prices is not being transferred to the people of Pakistan?

 

Where is the money collected from PDL being spent when no subsidy is being given?

 

Who is responsible for this? How should we make people aware of this situation?

 

How can we ask the responsible persons for given proper justification for this action?

 

Notes:

The international prices are determined by OGRA in accordance with the Import Parity Formula.

 

Sources:

 

All the information given above has been taken from the website of OGRA which is a public information. http://www.ogra.org.pk

Pakistan’s Oil Imports as of Nov 2008

At present, Saudi Arabia and the UAE are providing Pakistan crude on deferred payment for 30 days.

Pakistan imports 82 percent of its annual requirement — around 250,000 barrels a day from Saudi Arabia, 150,000 from Abu Dhabi, 18,000 from Qatar and 15,000 barrels from Iran.

In July 2008, the government had requested the UAE and Qatar to grant Pakistan the SOF or let it import oil without interest or extend the credit facility to import oil on deferred payment.

In January, Kuwait extended the interest-free credit facility for oil to Pakistan’s caretaker government for 60 days. The facility will remain effective till the end of 2008.