Starting June 1, 2024, Pakistan plans to implement a significant reduction in petroleum prices, with petrol prices expected to decrease by Rs5.27 per litre and diesel by Rs4.13 per litre.
This adjustment in petroleum prices will be effective for the next fortnight, marking a notable shift in the pricing of petroleum products in response to global market conditions.
The decision to lower fuel prices is primarily driven by a further decline in the Brent crude oil price, which has fallen to $81.4 per barrel from a previous $83 per barrel. This decrease comes despite production cuts by OPEC members, highlighting the complex dynamics of the global oil market. While some OPEC countries have reduced their output, others have not followed suit, contributing to an overall surplus of petroleum products in the market.
Currently, the international market is experiencing a glut of petroleum products, which has exerted downward pressure on Brent crude prices. The reduction in the premium on Brent and other crude oils per barrel also reflects this trend. The recent resolution of the Israel-Palestine conflict, which had previously disrupted the global oil market, has further stabilized the situation, allowing prices to decline.
According to official and industrial sources in Pakistan, the latest working on petroleum, oil, and lubricants (POL) prices conducted up to Wednesday, just two days before the end of May, indicates a substantial drop in prices for the upcoming fortnight. Petrol prices are projected to fall by Rs5.27 per litre, bringing the new price to Rs267.83 per litre from the current Rs273.10 per litre. Diesel prices are expected to decrease by Rs4.13 per litre, resulting in a new price of Rs269.95 per litre, down from Rs274.08 per litre.
In addition to petrol and diesel, other petroleum products are also set to become cheaper. The price of kerosene is anticipated to drop by Rs2.15 per litre, reducing it to Rs171.33 per litre from Rs173.48 per litre. Similarly, light diesel oil (LDO) is expected to see a reduction of Rs5.08 per litre, bringing its price down to Rs156.09 per litre from Rs161.17 per litre. This marks the third consecutive reduction in POL prices since May 1, 2024, offering continued relief to consumers.
The sustained decrease in petroleum prices is a welcome development for both consumers and businesses, as it is expected to lower transportation and production costs. This, in turn, could have a positive ripple effect on the broader economy, potentially leading to reduced prices for goods and services.
However, the long-term stability of fuel prices remains uncertain in Pakistan, as global oil markets are influenced by a myriad of factors, including geopolitical events, production decisions by oil-producing countries, and changes in demand. For now, though, consumers can look forward to more affordable fuel prices in the immediate future.
As Pakistan prepares to implement these new prices, the continued monitoring of global oil market trends will be crucial to ensure that any future adjustments are timely and responsive to both international developments and domestic economic needs.
