Islamabad, July 12, 2023 – Pakistan is gearing up to announce the petroleum prices for the second half of July 2023, as the country faces the challenges of surging international oil prices and stringent conditions under the International Monetary Fund (IMF) loan program.
The government of Pakistan revises petroleum prices twice a month, with the next scheduled announcement set for July 15, 2023. These prices will remain applicable until July 31, 2023.
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This announcement comes at a critical juncture, as international oil prices have reached multi-month highs. At the time of filing this news report, Brent futures rose by $1.71, or 2.2%, settling at $79.40 per barrel. Similarly, US West Texas Intermediate (WTI) crude rose by $1.84, or 2.5%, settling at $74.83 per barrel. This marks the highest settlement for Brent since April 28 and WTI since May 1.
Pakistan heavily relies on petroleum imports to meet its domestic demands, making the announcement of these prices particularly significant. Notably, Pakistan’s oil import bill during July to May 2022-23 amounted to $15.38 billion, representing a 22% decline compared to the corresponding period of the previous fiscal year’s $19.68 billion.
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Despite lower international rates, the present coalition government led by PML-N has maintained higher prices in the domestic market. Consequently, the recent surge in international oil prices may impact local prices. However, the import of Russian crude oil, which is procured at comparatively lower rates, might provide an opportunity for downward price adjustments in the local market.
On the other hand, the government aims to generate revenue through the implementation of a petroleum levy during the fiscal year 2023-24. In the most recent update on July 1, 2023, the government decided to increase the rate of high-speed diesel by Rs7.50, resulting in a new price of Rs260.50 per liter. This adjustment reflects the ongoing efforts to manage the economic landscape while considering the nation’s needs.
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The implementation of the petroleum levy is a significant factor contributing to 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. Starting from 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, has diminished due to the new levy rate of Rs55.
Citizens of Pakistan had anticipated a decrease in petroleum prices with the arrival of cheaper Russian oil. However, these expectations remain unfulfilled at present, leaving the population grappling with the existing prices.
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As Pakistan continues to navigate its economic landscape, the government’s decisions regarding petroleum prices will significantly impact the cost of living and overall economic conditions in the country. Citizens and industry stakeholders will closely monitor any future revisions to petroleum prices, as they continue to play a pivotal role in shaping the nation’s financial landscape.
