Pakistan Likely to Cut Petroleum Prices For 1st Half of May 2024

Pakistan Likely to Cut Petroleum Prices For 1st Half of May 2024

Islamabad, April 30, 2024 – Pakistan is poised to lower petroleum prices significantly for the first half of May 2024, reflecting a substantial decline in global oil prices.

Sources indicate that starting May 1, 2024, the prices for petrol and high-speed diesel (HSD) will see notable reductions in response to the falling prices of Brent crude, which recently dipped to $88.89 per barrel, marking a decrease of 0.88 percent.

The government is expected to slash the price of petrol by almost Rs5 per liter, bringing it down to Rs288 from the current Rs293.94. Diesel prices are set to decrease by Rs8 per liter to Rs282.38 from Rs290.38. These adjustments are part of a fortnightly review that takes into account the latest trends in the international petroleum market.

Further price reductions are anticipated for other petroleum products as well. Kerosene is likely to see a reduction of more than Rs8 per liter, lowering its price from Rs93.08 to Rs85.05. Light Diesel Oil (LDO) prices are also expected to decrease by Rs5.37 per liter, setting the new price at Rs68.97 from a previous Rs174.34.

These new pricing decisions have been calculated based on the existing government tax regime and internal freight equalization margins, which will remain unchanged at Rs6.75 per liter for petrol and Rs3.71 per liter for HSD. The pricing structure also includes a petroleum premium of $9.60 per barrel for petrol and $6.50 per barrel for HSD.

According to the latest data, the ex-refinery price of petrol is projected to fall to Rs205.80 from Rs210.68, while HSD will decrease to Rs202.70 from Rs210.07 per liter. Prices for kerosene and LDO are also expected to drop to Rs175.46 and Rs162.85 per liter respectively.

The government continues to impose a petroleum levy of Rs60 per liter on both petrol and diesel. Additionally, dealers receive a margin of Rs8.64 per liter on these fuels, along with district margins (including extra margins) of Rs7.87 per liter.

This upcoming reduction follows a price increase in the last fortnightly review on April 15, 2024, when petrol prices were raised by Rs4.53 per liter, and diesel by Rs8.14 per liter. The decision to lower prices now is aligned with the global downward trend in crude oil prices, providing some relief to Pakistani consumers who have faced high fuel costs in recent times.

Economic analysts believe that these reductions will not only lessen the financial burden on consumers but also potentially stimulate economic activity by lowering transportation and production costs. The government’s ability to adjust fuel prices in response to international market conditions is seen as a crucial step in managing the domestic economic impact of global oil price fluctuations.