Petrol price to drop Rs2.97 per litre from September

ISLAMABAD: A slight decrease in petrol price in Pakistan is expected from September 1, as a result of fluctuations in global oil market.

The government has estimated a reduction of Rs2.97 per litre in the price of petrol and Rs2.31 per litre for high-speed diesel (HSD).

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Meanwhile, kerosene oil and light diesel oil (LDO) are projected to drop by Rs1.19 and Rs1.96 per litre, respectively.

The price of petrol is expected to decrease from Rs260.96 to Rs257.99 pre litre; while the price of HSD is expected to fall from Rsq266.07 to Rs263.76 pre litre.

Similarly, the kerosene oil prices are projected to drop to Rs170.38 pre litre, while LDO prices might de3crease to Rs155.06 pre litre.

The current prices of the petroleum products in the open market are Rs260.96 per litre for petrol, Rs266.07 per litre for HSD, Rs177.71 per litre for kerosene oil, and Rs157.02 per litre for LDO.

Read more: Third consecutive petrol, diesel price cut on the cards for Pakistanis

According to sources, the Oil and Gas Refining Authority (OGRA) will forward its recommendation regarding the future oil prices on August 31. Prior to this, the fiance ministry will consult with the Prime Minister before making a final decision.

The proposed price cuts are based on the current tax structure that includes the petroleum levy. The levy was increased in the 2024-2024 fiscal year (FY) budget from Rs60 to Rs70 per litre. However, it has remained at Rs60 per litre to date.

Read more: Petrol price expected to be reduced by up to Rs6 per litre on September 1

The government also managed to maintain a zero sales tax on petroleum product, with the revenue collection primarily coming through the levy.

The inland freight equalisation margin (IFEM) was also recently revised upwards, which will also impact fuel pricing in the country. The IFEM was increased from Rs7.79 to Rs8.3 per litre, while the IFEM on HSD was increased from Rs4.4 to Rs5 per litre.

The federal government’s decision to reduce fuel prices is expected to provide some relief to the battered consumers already struggling with a free-falling inflation.