Islamabad: Petrol prices in Pakistan are poised to witness a substantial drop, potentially reaching up to Rs10 per liter, alongside a Rs2 per liter reduction in diesel prices for the next 15 days starting January 16. This positive shift is attributed to the recent decline in global oil prices, the strengthening of the Pakistani rupee against the US dollar, and a reduction in the premium on petroleum products.
As of today, the current petrol prices in Pakistan stands at Rs267.34 per liter, while diesel is priced at Rs276.21 per liter. Reliable sources reveal that over the past 15 days, global petroleum product prices have experienced a downward trend. Simultaneously, the value of the Pakistani rupee has seen an increase against the US dollar, coupled with a decrease in the premium on petrol purchases.
Authorities report that in the last two weeks, the global market witnessed a drop in petrol prices from $84.50 per barrel to $83 per barrel, and diesel prices fell from $97 per barrel to $95.85 per barrel.
The appreciation of the Pakistani rupee is also noteworthy, settling at Rs280.40 against the US dollar on the last trading day (Friday), a notable improvement from the last week of December when it stood at around Rs283.
Consequently, there is a high likelihood of a substantial reduction in petrol prices by at least Rs9 per liter and a Rs2 per liter drop in diesel prices. Additionally, prices for kerosene and light diesel oil are also expected to decrease by approximately Rs2 per liter.
Presently, the government imposes a petroleum levy of Rs60 per liter on both petrol and diesel, which is the legal maximum limit. The government had initially set a budget target of collecting Rs869 billion through petroleum levy for the fiscal year-2024 with the IMF. However, it is now anticipated that this target will surpass Rs950 billion by the end of June.
As fuel prices significantly influence inflation rates, which reached 29.7 percent in December, the reduction in prices is expected to provide some relief to consumers. The government currently collects about Rs82 per liter in taxes on both petrol and diesel, while there is a zero general sales tax on all petroleum products. Notably, the government collects Rs60 per liter in petroleum development levy and Rs50 per liter levy on diesel, high octane blending component, and 95 research octane number (RON) petrol.
