Petrol and Diesel Prices
ISLAMABAD: In a promising turn of events, the citizens of Pakistan can anticipate a substantial reduction in petrol and diesel prices, estimated to be around Rs 9-10 per litre and Rs 2 per litre, respectively, starting January 15. This positive development is attributed to a confluence of factors including a decline in international oil prices, favourable exchange rate gains, and a decrease in the procurement premium.
Reliable sources report that global prices of all petroleum products have witnessed a decline over the past fortnight. The cost of petrol has decreased by more than a dollar, from $84.50 to $83 per barrel, while high-speed diesel (HSD) has become more affordable by approximately $1.10 per barrel, dropping from $97 to $95.85. Additionally, the rupee has strengthened against the US dollar, reaching Rs280.40 on Friday, compared to about Rs283 at the end of December.
The reduction in premium paid by Pakistan State Oil (PSO) for securing product cargoes has further contributed to the optimistic forecast. While the premium for HSD remains unchanged, the premium for petrol has decreased from $10.5 to $7.50 per barrel.
Therefore, the expected decrease in petrol prices is projected to be at least Rs9 per litre, with HSD likely to see a Rs2 per litre reduction. Kerosene and light diesel oil prices are also anticipated to decrease by about Rs 2 per litre each.
This reduction in fuel prices comes as a relief to consumers and is expected to have a positive impact on inflation, which stood at 29.7% in December. The government, having already achieved the maximum permissible limit of Rs60 per litre petroleum levy on both petrol and HSD, is on track to meet its budget target of collecting Rs869 billion in petroleum levy during the current fiscal year. The government aims for this collection to surpass Rs 950 billion by June 2024.
It is noteworthy that petroleum and electricity prices have been key drivers of inflation, and the government is currently charging about Rs 82 per litre in taxes on both petrol and HSD.
