What will be the new petrol price in Pakistan on January 1st?

ISLAMABAD: Pakistan is anticipated to refrain from making significant changes in the prices of petrol and diesel in the first half of January 2024, following a slight increase in global crude rates.

According to estimates from Oil Marketing Companies (OMCs), the prices of petrol and kerosene oil (SKO) are expected to decrease by only Re1 per litre in Pakistan.

In contrast, the prices of high-speed diesel (HSD) and light diesel oil (LDO) in Pakistan may increase by Rs2 per litre.

This suggests that Pakistanis may not receive positive news or relief, as the expected reduction in petrol prices is not significant.

It is important to note that OMCs’ estimates are based on zero adjustments in the exchange rate, current petroleum levy (PL) rates, and general sales tax (GST) rates.

Presently, the government of Pakistan is imposing a Rs60 per litre petroleum levy on petrol and diesel.

Companies involved in crude oil transportation have halted sending some tankers through the Red Sea to avoid the threat of drone and missile attacks by Houthi rebels in Yemen.

Rerouting the oil vessels could result in delays and additional costs, putting upward pressure on oil prices, as suggested by experts.

Data from the Pakistan Bureau of Statistics (PBS) indicates a 29 per cent decrease in refined product imports to $499 million in November 2023 compared to $708 million the previous year.

Meanwhile, crude oil imports increased by four per cent to $566 million from $546 million in the same month last year.

Due to higher petroleum prices, Pakistan experienced a significant 16 per cent decline in the sale of petroleum products in the initial five months (July–November) of fiscal year 2023 compared to the same period last year, according to the Oil Companies Advisory Council (OCAC).

Internationally, Brent oil prices have remained between $77.95 and $81.07 per barrel since December 16, 2023. In the last review, the government applied a Rs284.28 exchange rate against the US dollar.

Currently, the petrol price in Pakistan stands at Rs267.34 per litre throughout the country. However, it is being sold at Rs268.18 in Islamabad due to dealer margins and the difference in ex-depot rates.

On the other hand, Hi Octane is being sold at Rs311.88 per litre at Pakistani petrol pumps.

According to current reports, all insiders suggest that the inflation-hit masses of Pakistan may not experience significant relief in the price of petrol.

If implemented, the reduction is not expected to be substantial enough to make a major difference to local wallets.

The official petrol price notification is expected to be released on the night of Sunday, December 31.

The new petrol price will become effective on Monday, January 1, 2024, and will remain in effect until the next fortnightly review.

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