ISLAMABAD: For the second consecutive fortnight, the prices of major petroleum products, including petrol and high-speed diesel (HSD), are expected to decrease by up to Rs9.20 per litre due to a decline in international prices.
Sources indicate that international prices for petrol and HSD have fallen by more than $3 per barrel over the past two weeks. Based on current exchange rates and tax structures, petrol prices could drop by Rs8.50 to Rs9.30 per litre, while HSD prices may fall by Rs8 to Rs9 per litre.
Recent data shows that the average international price of petrol has decreased to $84 per barrel, and HSD has also dropped to around $91 per barrel. Despite this, the import premiums for petrol and HSD have remained steady at approximately $9 and $5 per barrel, respectively. However, the local currency has weakened slightly against the US dollar during this period.
Currently, the ex-depot price for petrol stands at Rs269.43 per litre, while HSD is priced at Rs272.77 per litre. In the last fortnightly review on July 31, the government had reduced petrol and HSD prices by about Rs6.17 and Rs10.86 per litre, respectively, following increases in July. Earlier, from May 1 to June 15, prices had dropped by approximately Rs35 and Rs22 per litre for petrol and HSD, respectively.
Additionally, kerosene and light diesel oil are projected to become cheaper by Rs10 and Rs5 per litre in the upcoming fortnight.
Petrol, used primarily in private transport, small vehicles, rickshaws, and two-wheelers, significantly impacts the budgets of the middle and lower-middle classes. HSD, used mainly in heavy transport vehicles, trains, and agricultural machinery, affects the cost of goods and services, including vegetables and other essentials. However, reductions in petroleum prices are rarely reflected in transportation fares and prices of essential commodities.
The government has increased the maximum limit of the petroleum levy to Rs70 per litre in the finance bill, aiming to collect Rs1.28 trillion in the next fiscal year, up from Rs1.019 trillion collected in the previous year. This target is nearly Rs150 billion higher than the previous budget target of Rs869 billion.
Currently, the government imposes approximately Rs78 per litre in taxes on petrol and HSD. Although the general sales tax (GST) is zero on all petroleum products, a petroleum development levy (PDL) of Rs60 per litre is applied to both products. Additionally, about Rs18 per litre in customs duties and Rs17 per litre in distribution and sale margins are also included.
