The Petroleum Pricing Committee (PPC) met on Monday 8th October 2018 and after verification of the computation of the retail prices of Mogas and Gas Oil, as provided for under Regulation 8 of the Consumer Protection (Control of Price of Petroleum Products) Regulations 2011 (as amended), approved that the retail prices be maintained at their present level as per Regulation 5(3):

Product       

Retail Price
Rs / Litre

Mogas

49.65

Gas Oil

40.00


The retail prices of Mogas and Gas Oil were fixed at Rs49.65 and Rs40.00 per litre respectively at the meeting of the PPC held on 14th June 2018. The Reference Prices used at that time were US$729.98 per M.Ton for Mogas and US$88.62 per barrel  for Gas Oil. Since then, the FOB prices on the world market have evolved as shown in the graphs below.

As stated in the press release of 14th June 2018, the Price Stabilisation Account (PSA) had a negative balance of Rs165.7 million. However, decision has been taken to transfer an amount of Rs350 million from the “Subsidy Reserve Fund” to the PSA. As such, at 8th October 2018 the PSA shows a positive balance of Rs296 million.

The Reference Prices used for the present exercise, that is the actual prices for July to September 2018 and the future prices for October to December 2018 are US$729.46 per M.Ton for Mogas, representing a decrease of US$0.52 per M Ton (0.07%), and US$93.15 per barrel for Gas Oil, representing an increase of US$4.53 per barrel (5.11%) compared to June 2018.

Based on the above Reference Prices and the exchange rate of Rs35/US$, the retail price of Mogas should have been increased by Re0.85 per litre or 1.72%. Since the percentage increase is below 4%, the retail price has been maintained as provided in the Regulations. The retail price of Gas Oil should have been increased by Rs2.05 per litre or 5.13%, but has been maintained at its present level by using fund from the PSA in line with the Regulations.

As per Government decision, margins for Oil Companies and Petrol Service Stations have been reviewed for both Mogas and Gas Oil. The “Contribution to the construction of storage facilities for petroleum products” has also been reviewed to make provision for the Mer Rouge Oil Storage Terminal Co. Ltd (MOST) project for the additional storage of 15,000 M.Tons of Mogas and 10,000 M.Tons of Gas Oil.

The evolution of the world prices of Mogas and Gas Oil since June 2018 is shown in the graphs below.                                             

                                                         Graph 1 - Mogas                                                                                                                                         

                                           

                                                Graph 2 - Gas Oil

                                                                                      


Based on the new Reference Prices, the retail prices of Mogas and Gas Oil are Rs49.65 per litre and Rs40.00 per litre respectively as shown below:

                         

Mogas

Gas Oil

Reference Price  - US$ per metric ton

729.4600

 -

Reference Price  - US$ per barrel

-

93.1500

CIF - US$/litre

0.5829

0.6103

Exchange rate – Rs/US$

35.0000

35.0000

 

                     Rupees per litre

CIF

20.4015

21.3605

Excise duty

14.8000

7.3000

Contribution to Road Development Authority

1.8500

1.7500

Contribution to Rodrigues transportation and storage

0.4100

0.4100

Contribution to the construction of storage facilities for petroleum products

0.3000

0.3000

Contribution to subsidy on LPG, Flour and Rice

1.7500

1.2000

STC’s operational expenses

0.3500

0.4000

Adjustment

(0.7416)

-

Fund from Price Stabilisation Account

-

(1.7859)

TRANSFER PRICE TO OIL COMPANIES

39.1199

30.9346

Oil Companies’ operational expenses and wholesale margin

2.1500

1.9800

VAT (15%)

6.4761

5.2174

WHOLESALE PRICE

47.7460

38.1320

Retail margin

1.9040

1.8680

RETAIL PRICE (Price at Petrol Service Station)

49.6500

40.0000

 

08 October 2018