Islamabad, October 29, 2024 — In response to shifting dynamics in global oil markets, Pakistan will adjust domestic petroleum prices for the first half of November 2024, with changes set to take effect on November 1. Despite a global downturn in oil prices, sources indicate that the country’s petrol and high-speed diesel (HSD) prices will see a nominal increase, potentially rising by up to 78 paisa per liter.
This slight upward revision arrives amid a persistently high tax regime on petroleum products within Pakistan. Currently, a combined tax, duty, and petroleum levy (PL) totaling Rs90 per liter is levied on both petrol and diesel, positioning the country among those with the highest fuel taxation in the region. This heavy tax burden has made it challenging for Pakistan to translate falling international prices into significant relief for local consumers.
The global average price of petrol has recently fallen to $76 per barrel, down from $77.5, while HSD prices have similarly decreased, now standing at $84 per barrel compared to the previous $86.5. Over the past fortnight, this decline has translated to reductions of approximately $1.5 and $2.5 per barrel for petrol and HSD, respectively.
Despite these reductions, Pakistan petrol prices are anticipated to increase from Rs247.03 to Rs247.81 per liter, while HSD prices may rise from Rs251.29 to Rs251.55 per liter. In contrast, a reduction is expected for kerosene oil and light diesel oil (LDO), with kerosene potentially decreasing by Rs1.42 per liter and LDO by Rs3.32 per liter. However, these figures remain preliminary, with the final pricing decision scheduled for review on October 30, 2024.
The ex-refinery price, a pivotal determinant of domestic fuel costs, has also been pre-assessed. Projections suggest a potential decrease of Rs3.29 per liter for petrol and Rs3.13 per liter for HSD, indicating a possible cushion against the tax-induced price hike. Additionally, the premium on petrol remains set at $8.84 per barrel, with the Inland Freight Equalization Margin (IFEM) on petrol and HSD estimated at Rs7.79 and Rs4.44 per liter, respectively.
The imminent price adjustment underscores the complex interplay between global market forces and domestic fiscal policies in shaping Pakistan fuel costs. As October 31 approaches, the final assessment will determine whether recent global price dips will offer Pakistanis any substantial relief or if high taxes and operational margins will continue to dominate the landscape. This decision holds particular significance as it impacts household budgets, transport costs, and industrial expenses, with reverberations expected across multiple sectors of the economy.