Petrol and diesel prices in Pakistan are expected to fall below Rs 300 per liter in the coming fortnightly review. The reason for this expected decrease is the significant drop in global oil prices and the appreciation of the Pakistani rupee. According to reports, the caretaker federal government is likely to reduce the price of petrol by Rs 36 per litre, bringing it below Rs 300. Currently, petrol is being sold at Rs 323.38 per litre.
High Speed Diesel (HSD) prices are also expected to drop by Rs 19 per litre. The government is scheduled to announce the revised prices for the next fortnight of October 2023 on October 16.
In the international market, petrol price has decreased by $10 to $104 per barrel, while diesel is selling at $118 per barrel after a drop of $8. This decline in global oil prices, the increase in the value of the Pakistani rupee against the US dollar, is expected to reduce petroleum prices.
The caretaker government had earlier announced a cut in petrol price by Rs 8 per liter and diesel price by Rs 11 per liter on September 30. This upcoming reduction will be the second consecutive reduction in fuel prices after three fortnights in a row.
It is worth noting that the government imposes taxes and levies on petroleum products, which aim to meet budgetary targets and commitments made with the International Monetary Fund (IMF) during the current financial year, about Rs. A billion rupees is to be collected in the form of levy. The government levies a tax of around Rs 82 per liter on petrol and Rs 73 per liter on high-speed diesel.
The drop in fuel prices is expected to weigh on inflation, which had reached 31.4 percent in September due to factors such as higher electricity and fuel costs. Both petrol and high-speed diesel prices are major sources of revenue for the government, with significant monthly sales. This reduction in prices is significant for the middle and lower middle class and various sectors of the economy.