ISLAMABAD, Mar 6: Minister for Finance, Revenue and Economic Affairs Asad Umar on Wednesday informed the Senate that the sale prices of petroleum products were fixed in paisas along with rupee as per standard international practice despite withdrawing legal status of decimal coins of five, ten, 25 and 50 paisas since 2013.
The minister, in a written reply to the question of Senator Sitara Ayaz, said the main aim of discontinuing the use of decimal coins was to facilitate the settlement of transactions in the economy.
He said,”The coins carrying metallic contents become economically unfeasible if the intrinsic value of coins exceeds the face value of the coin. Various actual cost components included in oil prices are in rupee with paisas, therefore, sale prices of petroleum products are fixed in paisas along with rupee, which is also a standard international practice.”
Moreover, he said, the international oil prices were published and charged in respective currency along with fractions (cents/pennies) while exchange rate was also published in rupee with paisas.
The oil marketing companies and pump dealers margins, he said, were computed on consumer price index (CPI) that was published by Bureau of Statistics in fraction while the last component of the oil price was sales tax, which was notified by the Federal Board of Revenue (FBR) in term of percentage, due to which the ultimate ex-depot sale price was determined in rupee with paisas.
The minister said currently almost all the petrol pumps had digital dispensing units. “Now it is the consumer’s choice whether they buy products in liters or in rupee terms to avail or avoid fraction. The above mechanism rightly translates oil prices internationally to reflect into Pakistan rupee.”
Based on the other elements of price determination as referred to above including tariff determination by Oil and Gas Regulatory Authority (OGRA), the oil prices would eventually be calculated to Rs and decimal /paisas, he added.
(APP)
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