On Tuesday, the federal government is likely to lower the prices of petroleum products, anticipating a reduction of up to Rs8 per liter for petrol and diesel.
The decline in global crude oil prices over the past two weeks has prompted the government to contemplate a reduction of Rs5.04 for petrol and up to Rs8 for diesel per liter.
Additionally, kerosene oil and light diesel oil (LDO) prices are anticipated to be reduced by Rs8.03 and Rs5.4 per liter, respectively.
However, the Oil and Gas Regulatory Authority (Ogra) has not yet submitted its summary, and any decision on reducing petroleum product prices will be made by the Finance Ministry after consultation with the prime minister.
If the anticipated price cuts materialize, petrol prices would decrease from Rs293.94 to Rs288 per litre, and diesel from Rs290.38 to Rs282.38 per litre for the upcoming fortnight.
Similarly, the new rates for kerosene oil and LDO would be Rs85.05 and Rs168.97 per liter, respectively, down from Rs93.08 and Rs174.34 per liter.
Based on existing government taxes, internal freight equalization margins, and premium rates for petrol and HSD, calculations indicate potential reductions in ex-refiner prices for petrol, HSD, kerosene, and LDO per liter.
The government imposes a petroleum levy (PL) of Rs60 per liter on petrol and diesel, with dealers receiving a margin of 8.64 per liter for both products. Additionally, district margins, including extra margins, are charged Rs7.87 per liter each on petrol and diesel.
It is worth noting that on April 15, the government increased petrol and diesel prices by Rs4.5 and Rs8.1 per liter, respectively.
Every 15 days, the government reviews and adjusts petroleum product prices in response to global oil price fluctuations and changes in the local currency’s value. Considerations for determining petroleum product prices include expected fuel consumption and supply costs of Pakistan State Oil, the state-owned oil corporation, as well as monthly tax targets.
