Petrol Prices are Expected to Decrease by Approximately Rs34 From 16th October 2023

In the upcoming fortnight of June, consumers in Pakistan can expect a slight relief as the price of petrol is anticipated to decrease by Rs1.87 per litre. However, this reduction will be accompanied by a rise in the price of high-speed diesel (HSD) by Rs3.29 per litre, posing challenges for both individuals and industries.

Reliable sources within the oil industry have revealed that these changes in petrol and diesel prices are influenced by the current rates of petroleum levy and general sales tax (GST). Pakistan State Oil (PSO) has projected an exchange rate adjustment of Rs3.50 per litre for petrol and Rs0.31 per litre for diesel.

Moreover, the government enforces an Inland Freight Equalisation Margin (IFEM) of Rs4.04 on each litre of petrol and Rs3.79 on diesel. If these adjustments receive approval, the ex-depot rate for petrol will amount to Rs260.13 per litre, down from the current market price of Rs262.

Conversely, the ex-depot diesel price may surge to Rs256.29 per litre compared to the existing market rate of Rs253. This potential increase has raised concerns among consumers who heavily rely on diesel for transportation and power generation.

In addition to these developments, the price of kerosene oil is projected to rise by Rs2.10, reaching Rs166.17 per litre ex-depot. Similarly, the price of light diesel oil (LDO) is expected to climb by Rs2.48 to Rs150.16 per litre. These adjustments could significantly impact households reliant on kerosene oil for cooking and industries that require LDO.

These fluctuations in fuel prices reflect the government’s ongoing efforts to strike a balance between stabilizing the economy and addressing challenges in the energy sector. The government aims to maintain fair consumer prices while managing fiscal constraints. The anticipated decrease in petrol prices is expected to provide some relief to motorists as the cost of operating vehicles will slightly reduce.

Regarding the impact of Russian crude oil imports on petroleum product prices in the coming fortnight, officials stated that it would not influence the current price review, as the crude oil recently arrived in Pakistan and processing began on Wednesday.

It is estimated that refined products derived from Russian crude oil will enter the market within two weeks. However, even with the arrival of these products, domestic prices are not expected to experience a significant impact due to the relatively low quantity in relation to the country’s consumption.

Officials emphasized that even after the arrival of the second cargo on June 20, consumer prices will remain unaffected until the share of Russian crude oil exceeds 30% of the total imported crude oil.

It is important to note that the information provided is subject to approval and may be subject to change based on market conditions and government decisions.