As Internationally Oil Price Decline, Govt Likely To Maintain Petrol, Diesel Prices

pakistan petrol price

KARACHI:The government has decided not to raise fuel taxes or lower diesel and gasoline prices for local consumers in order to make up for previous exchange losses despite a significant drop in international oil price.

The average fortnightly prices of both gasoline and diesel will be taken into consideration for the subsequent price revision on February 28, 2023, due to the significant decline in their global market prices.

Sources in the oil industry claim that the average price of diesel decreased by Rs30 per liter in Pakistani rupees for the domestic price of diesel for the following fortnightly review, or $7 per barrel. In comparison to the previous fortnight, the price of diesel on the global market has decreased to approximately $100 per barrel.

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The average price of gasoline decreased to $90 per barrel during the most recent price review, from $93 per barrel during the most recent fortnightly price review. This represents a savings of Rs10 per liter for consumers in the local market.

Sources said, the average exchange rate for the upcoming price review decreased by Rs8 due to the rupee’s appreciation against the dollar over the past two weeks, which also reduced the import price of diesel and gasoline.

However, sources from the oil industry were skeptical that domestic consumers would see a significant decrease in the prices of diesel and gasoline because the government was expected to adjust the exchange losses, which it did not fully transfer to the oil industry in the previous numerous reviews.

For instance, the government transferred only Rs12 per liter of diesel, leaving the remaining Rs88 per liter in need of adjustment for exchange loss adjustment.

According to sources, “it is likely that the government would pass on part of the adjustment because of getting space on the exchange rate side.”

Similarly, the government only provided the oil industry with Rs12 per liter despite being required to make an exchange loss adjustment of Rs34 per liter for gasoline.

While the government has room to raise the petroleum levy (PL) on diesel to Rs50 per liter under the terms outlined by the International Monetary Fund (IMF). Diesel currently costs Rs40 per liter.

If the government does not impose GST, sources anticipate a diesel price cut of Rs10 per liter, which would otherwise deprive local consumers of the global price drop for diesel.

Official industry sources do not anticipate a decrease in the price of gasoline for local consumers, which would have decreased by Rs10 based on trends in its global market price.