Fuel Relief on the Horizon: Islamabad Anticipates Significant Price Drop in Petroleum Products, Offering Economic Respite from January 16, 2024
ISLAMABAD: The interim government is poised to announce a moderate reduction in ex-depot prices for all petroleum products, potentially lowering them by up to Rs5.50 per litre starting January 16, 2024, maintaining the current tax rates.
Sources suggest that petrol prices may see a significant cut of Rs5.50 per litre for the latter half of January. However, no adjustments are expected in the rate of high-speed diesel (HSD).
Estimates also indicate a potential decrease of Rs3 per litre in the price of kerosene oil (SKO) and a slight reduction of Rs1.50 per litre in the price of light diesel oil (LDO).
In a notable move, the government has already reduced the price of petrol by Rs14 and HSD by Rs13.50.
The Oil and Gas Regulatory Authority (OGRA) is set to present its bi-weekly review to the Petroleum Division. The final decision will consider factors such as oil consumption, the prevailing petroleum levy (PL), general sales tax (GST), premium, exchange rate, and global oil prices.
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If the estimates hold true, the price of petrol may decrease from Rs267.34 to Rs261.84 per litre, while the rate of HSD could remain unchanged, with adjustments in exchange rate and a premium of $5.30 per barrel.
Additionally, the price of SKO is expected to drop from Rs188.83 to Rs185.83 per litre, and LDO may see a marginal decrease from Rs165.75 to Rs164.25 per litre.
This potential adjustment aligns with the reduction in Brent Oil prices, which fell by $1.5 per barrel from $84.50 to $83 since January 1, 2024. HSD rates have also become more affordable, showing a decline of around $1 per barrel from $97 to $95.80. Furthermore, the Pakistani rupee has strengthened against the US dollar by Rs3 during this period, reflecting positive developments in the economic landscape.
The anticipated adjustment in petroleum prices is expected to bring relief to consumers and contribute to economic stability.