Pakistan eyes drop in petrol, diesel prices amid global decline

ISLAMABAD: Petrol prices are likely to drop by aup to Rs10 per liter and diesel by Rs2 per liter for the next 15 days from January 15 due to the decline in global prices and appreciation of the rupee against the US dollar and reduction in premium on petroleum products.

The current petrol price price in Pakistan today stands at Rs267.34 per litre while the price of diesel at Rs276.21 per liter .

According to sources, during the last 15 days, there has been a decline in the prices of all petroleum products in the global market and there has also been an increase in the value of rupee against the dollar, while the premium on petrol purchase has also decreased.

The authorities said that during the last two weeks, the price of petrol in the global market has dropped from 84.50 dollars per barrel to 83 dollars per barrel, while the price of diesel has dropped from 97 dollars per barrel to 95.85 dollars per barrel.

On the other hand, the dollar depreciated against the Pakistani rupee and settled at Rs280.40 on the last day (Friday) of trading week, which was around Rs283 in the last week of December.

Therefore, there is a possibility of petrol becoming cheaper by at least Rs9 per liter and diesel by Rs2 per liter, while the prices of kerosene and light diesel oil are also expected to decrease by about Rs2 per liter.

The government is currently collecting Rs60 per liter petroleum levy on petrol and diesel, which is the maximum limit under the law.

The government had set a budget target of collecting Rs869 billion through petroleum levy during the fiscal year 2024 with the IMF, but now it is expected that this target will be increased to more than Rs950 billion by the end of June.

Petroleum products and electricity prices are an important driver of inflation, which reached 29.7 percent in December.

At present, the government is collecting about Rs82 per liter tax on both petrol and diesel, while the general sales tax on all petroleum products is zero, however, the government is collecting Rs60 per liter petroleum development levy and Rs50 per liter levy on diesel, high octane blending component and 95 research octane number (RON) petrol.

It may be recalled that, the government had decided to keep the prices of petrol and diesel unchanged on the beginning of the new year.