Petrol prices in Pakistan are expected to witness a substantial drop of up to Rs10 per liter, while diesel is anticipated to decrease by Rs2 per liter in the upcoming 15 days starting from January 15. This adjustment is attributed to various factors, including the global decline in petroleum prices, the strengthening of the Pakistani rupee against the US dollar, and a reduction in the premium on petroleum products.
As of now, the current price of petrol in Pakistan stands at Rs267.34 per liter, and diesel is priced at Rs276.21 per liter. Over the past 15 days, there has been a noticeable decline in global petroleum product prices, an increase in the value of the rupee against the dollar, and a decrease in the premium associated with purchasing petrol.
The global market witnessed a drop in petrol prices from $84.50 per barrel to $83 per barrel, and diesel prices decreased from $97 per barrel to $95.85 per barrel during this period. Simultaneously, the Pakistani rupee appreciated against the US dollar, settling at Rs280.40 on the last trading day of the week, compared to around Rs283 in the last week of December.
As a result, there is a strong possibility that petrol prices may decrease by at least Rs9 per liter, while diesel could see a reduction of Rs2 per liter. Additionally, the prices of kerosene and light diesel oil are expected to decrease by approximately Rs2 per liter.
It’s noteworthy that the government currently collects the maximum allowed petroleum levy of Rs60 per liter on both petrol and diesel. The government had initially set a budget target of collecting Rs869 billion through petroleum levy for the fiscal year 2024 with the IMF, but it is now expected that this target may exceed Rs950 billion by the end of June.
Petroleum product prices and electricity rates significantly impact inflation, which reached 29.7 percent in December. The government is currently imposing about Rs82 per liter in taxes on both petrol and diesel, with a zero general sales tax on all petroleum products.
It’s worth mentioning that the government had decided to maintain unchanged prices for petrol and diesel at the beginning of the new year. The anticipated drop in fuel prices is expected to provide relief to consumers and potentially contribute to the government’s revenue targets in the coming fiscal year.
