ISLAMABAD: Following two consecutive price hikes, petrol and high-speed diesel prices are projected to drop by approximately Rs3 and Rs8.50 per litre, respectively, starting August 1 for the next two weeks. This anticipated decline is primarily attributed to lower international market prices and reduced import premiums.
Sources indicate that the prices of these key products have decreased by about $2 and $3 per barrel in the international market over the past fortnight. Based on final calculations and existing tax rates, petrol prices are expected to fall by Rs2.90, while HSD is set to decrease by Rs8.50 per litre.
Officials report that the average price of petrol in the international market has fallen to $87.50 from $89.50 per barrel, while HSD prices have decreased to $94 from approximately $96.93 during the same period.
Projected Relief: Rs2.90 for Petrol, Rs8.50 for High-Speed Diesel
In the current fortnight, the import premium on both products has also declined, dropping to $8.80 from $9 for petrol and to $5 from $6.50 per barrel for HSD. Additionally, the exchange rate has remained relatively stable during this time.
In the current Finance Bill, the government has increased the maximum limit of the petroleum levy to Rs70 per litre, aiming to collect Rs1.28 trillion in the next fiscal year, compared to Rs960 billion in the previous year. This represents an increase of nearly Rs91 billion above the budget target of Rs869 billion.
Currently, the ex-depot price for petrol is Rs275.60, while HSD stands at Rs284 per litre. Under the new rates, petrol will remain above Rs272, and the HSD price will approach Rs275 per litre, assuming the government does not raise the petroleum levy.
Petrol is primarily used in private transportation, small vehicles, rickshaws, and two-wheelers, directly affecting the budgets of middle- and lower-middle-class families. Conversely, HSD is predominantly utilized in the transport sector, and its pricing is considered inflationary due to its use in heavy transport vehicles such as trains, trucks, buses, tractors, tube wells, and threshers. This ultimately impacts the prices of vegetables and other essential goods.
However, reductions in petroleum prices rarely translate to lower fares or decreased prices for essential commodities.
In June, petrol and HSD prices had risen by Rs7.45 and Rs9.56 per litre, respectively, on June 30. This was followed by another increase on July 16, with petrol prices rising by Rs9.99 and HSD by Rs6.18 per litre. Consequently, petrol and diesel rates have cumulatively increased by Rs17.44 and Rs15.74 per litre during the current month.
Between May 1 and June 15, both products had seen reductions of about Rs35 and Rs22 per litre, respectively.
The government currently imposes around Rs78 per litre in taxes on both petrol and HSD. While the GST on all petroleum products is zero, a Rs60 per litre petroleum development levy is applied to both products, significantly impacting consumers.
