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

After the global oil price fluctuations and the strengthening of the rupee against the US dollar, there is a likelihood of a significant reduction in the price of petrol, with an estimated decrease of Rs34.57 per liter, beginning on October 16, 2023. Nevertheless, the ultimate decision rests with the interim government, which may consider adjusting tax rates for petroleum products.

Sources indicate that the huge reduction in petrol prices could bring the cost down to Rs288.38 per liter from the current rate of Rs323.38. Petrol is primarily utilized in motorcycles and cars, serving as an alternative to compressed natural gas (CNG), especially in regions like Punjab, where locally produced gas is not readily available at CNG filling stations.

Additionally, liquefied natural gas (LNG) was previously used at CNG retail outlets, but its availability has become scarce due to a lack of import contracts by Pakistan Petroleum Limited (PPL). Similarly, the price of high-speed diesel (HSD) may experience a decrease of Rs15.91, potentially reducing it to Rs302.18 per liter for the upcoming two weeks. HSD is predominantly employed in the agriculture and transportation sectors, and any price reduction could have a positive impact on inflation.

For those in remote areas, the price of kerosene oil, which witnesses increased consumption during the winter season, is expected to drop by Rs21.95 to Rs215.33 per liter in comparison to the current rate of Rs237.28. Furthermore, the cost of light diesel oil, utilized in industrial facilities, is likely to decrease by Rs18.29, potentially reaching Rs194.16 per liter, down from the existing price of Rs212.45.

Currently, the government imposes a petroleum levy of Rs50 per liter on HSD, with the possibility of further increasing it by Rs10. However, the levy on petrol has already reached its maximum level of Rs60 per liter.

Sources suggest that the prices of petroleum products, as reflected on the Platts index, have seen a significant decline, and the rupee has gained strength against the dollar. Over the past 13 days, the rupee’s average appreciation is estimated at Rs7.50.