The federal government of PTI on Saturday decided to pass on the benefit of reduced oil prices to consumers from Monday.
The energy ministry warned the ECC that a reduction in petroleum prices would create a major supply disruption, which may take weeks and months to normalize as stocks with most of the OMCs were abnormally low.
A government official told that the ECC did not accept the proposal and decided that the benefit of reduction in prices should be utilized for the benefit of consumers.
The Oil and Gas Regulatory Authority (OGRA) proposed a reduction of Rs7.06 per litre in the price of petrol for June 2020 slashing the price from Rs81.58 to Rs74.52 per litre in line with the dip in global oil prices due to virus-fuelled lockdowns making meagre movement in traffic.
However, the regulator proposed a minute increase of Rs0.05 in the price of high-speed diesel (HSD) from Rs80.10 to Rs80.15 per litre which may have no impact on the inflation rate, which will directly benefit the public. With the start of crop harvesting season, the demand for diesel has increased.
Ogra proposed that petrol prices should be slashed from Rs81.58 to Rs74.52 per litre for June 2020 because fuel is mainly used in cars and motorcycles.
The regulator has suggested a reduction of Rs11.88 in the price of kerosene oil from Rs47.44 to Rs35.56 per litre. Kerosene is used for cooking, especially in far-flung areas where liquefied petroleum gas (LPG) or pipeline gas is not available.
In the price of light diesel oil (LDO), a reduction of Rs9.37 has been recommended from existing Rs47.51 to Rs38.14 per litre. LDO is used in industrial units.
This is important for the federal government of PTI to give oil price relief because there has been global oil price reduction which is rooted in widespread of corona-virus making no healthy movement in transport around the globe.