Islamabad, July 15, 2023 – In a surprising move, the government of Pakistan announced a significant reduction in petroleum prices, effective from July 16, 2023.
Finance Minister Ishaq Dar unveiled the decision, lowering the prices of petrol by Rs9 per liter and high-speed diesel (HSD) by Rs7 per liter for the next fortnight, ending on July 31, 2023.
The revised petroleum prices in Pakistan, effective July 16, 2023, are as follows:
• Petrol: Rs 253 per liter
• High-Speed Diesel: Rs 53.50 per liter
• Kerosene: Rs 164.07 per liter
• Light Diesel Oil: Rs 147.68 per liter
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This unexpected reduction comes at a time when Pakistan is grappling with soaring international oil prices and facing stringent conditions tied to the International Monetary Fund (IMF) loan program. The government’s decision to bring down the prices aims to alleviate the burden on the public.
It is noteworthy that Pakistan revises petroleum prices twice a month, and these new prices will remain in effect until July 31, 2023.
The announcement holds significant importance for Pakistan, considering the country’s heavy reliance on petroleum imports to meet domestic demands. Notably, Pakistan’s oil import bill from July to May 2022-23 decreased by 22% to $15.38 billion compared to the previous fiscal year’s corresponding period, which stood at $19.68 billion.
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Despite the recent surge in international oil prices, the current coalition government led by PML-N has maintained relatively higher prices in the domestic market. However, the import of Russian crude oil, procured at comparatively lower rates, presents an opportunity for potential downward price adjustments in the local market.
In contrast, the government intends to generate revenue through the implementation of a petroleum levy in the fiscal year 2023-24. Effective from July 1, 2023, the government increased the rate of high-speed diesel by Rs7.50, resulting in a new price of Rs260.50 per liter. This adjustment reflects the government’s ongoing efforts to manage the economic landscape while considering the nation’s needs.
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The implementation of the petroleum levy has played a significant role in the recent price hike. In the previous fiscal year, the government raised the levy to Rs50 per liter for both petrol and high-speed diesel. As of July 1, 2023, the levy has been further increased to Rs60 per liter for the current fiscal year. Consequently, the likelihood of a reduction in petrol prices until July 15, 2023, was diminished due to the new levy rate of Rs55.
However, in the latest decision, the government has opted not to impose any further levy until July 31, 2023, providing some relief to the citizens.
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Citizens of Pakistan had anticipated a decrease in petroleum prices with the arrival of cheaper Russian oil. The reduction in prices announced by the government comes as a pleasant surprise for the nation, offering temporary respite from the economic challenges posed by high oil prices.
