Pakistan to witness reduction in petrol prices from November 1

KARACHI: Pakistan is expected to witness a decrease in the prices of petroleum products, particularly petrol and high-speed diesel (HSD), effective from November 1, 2024.

According to informed sources, global prices have experienced a minor reduction, leading to an estimated decrease of Rs2 to Rs3 per litre for both petrol and HSD for the next fortnight.

The international market has seen a drop in prices, with petrol decreasing by approximately $1.5 per barrel and HSD by $2.5 per barrel over the last fortnight. This decline is projected to translate into an Rs3 per litre reduction in petrol prices and an Rs2.30 per litre decrease in HSD prices, contingent upon the final exchange rate calculation and existing tax rates.

Specifically, the average price of petrol has dropped from $77.5 to $76 per barrel, while HSD has declined from $86.5 to $84 per barrel.

During this period, the import premium on petrol and HSD remained relatively stable at $8.7 and $5 per barrel, respectively. Additionally, the exchange rate has remained steady.

Currently, the ex-depot prices for petrol and HSD stand at Rs243.03 and Rs251.29 per litre, respectively.

Notably, on October 15, 2024, the government increased the price of diesel by Rs5 per litre, while maintaining the petrol price at Rs247.03 until the end of October. This marked the first price hike in three months, following a consistent decline in international prices.

The price adjustment is expected to impact various sectors, as petrol is primarily used in private transport, small vehicles, rickshaws, and two-wheelers, affecting the budgets of middle- and lower-middle-class individuals.

In contrast, HSD is widely used in heavy transport vehicles, trains, agricultural engines, trucks, buses, tractors, tube wells, and threshers, making its price a significant factor in inflation and food prices.

The government currently levies approximately Rs76 per litre in taxes on both petrol and HSD, comprising Rs60 per litre Petroleum Development Levy (PDL) and Rs16 per litre custom duty.

Furthermore, oil companies and dealers receive around Rs17 per litre in distribution and sales margins.