Petrol, diesel likely to become cheaper by Rs10

ISLAMABAD: The petrol price is estimated to decline by about Rs9-10 per litre on Jan 15 for the next fortnight due to a combination of lower international prices, exchange rate gains and a decline in premium.

High-speed diesel (HSD) is also expected to be cheaper by around Rs2 per litre.

Informed sources said the prices of all petroleum products had declined in the international market over the past fortnight and the rupee had also gained against the US dollar while the premium on procurement of petrol had also come down.

The officials said the price of petrol had come down by more than a dollar from $84.50 to $83 per barrel over the last two weeks while HSD had become cheaper by about $1.10 per barrel from $97 to $95.85. The rupee on the other hand also gained against the dollar to Rs280.40 on Friday from about Rs283 in the last week of December.

The premium paid by Pakistan State Oil (PSO) for securing product cargoes remained unchanged for HSD but dropped to $7.50 from $10.5 per barrel last month.

Therefore, the petrol price is estimated to be cheaper by at least Rs9 per litre and that of HSD by Rs2 per litre. The prices of kerosene and light diesel oil are also expected to reduce by about Rs2 per litre each.

The government has already achieved a Rs60 per litre petroleum levy — the maximum permissible limit under the law — on both petrol and HSD. The government had set a budget target to collect Rs869 billion as a petroleum levy during the current fiscal year under the commitments made with the International Monetary Fund (IMF) but was hoping the collection to go beyond Rs950bn by the end of June.

Petroleum and electricity prices have been the key drivers of inflation, which clocked in at 29.7pc in December as measured by the Consumer Price Index.

At present, the government is charging about Rs82 per litre tax on both petrol and HSD.

Although the general sales tax on all petroleum products is currently zero, the government is charging Rs60 per litre petroleum development levy on petrol and Rs50 each on HSD, high-octane blending component, and 95 research octane number (RON) petrol.

Published in Dawn, January 13th, 2024