Petrol price likely to fall by Rs1.87 per litre

Diesel, however, may become expensive by Rs3.29 per litre

Zafar Bhutta June 15, 2023

Oil prices have been increasing in the international market since September 2020, resulting in substantial increase in consumer prices of petroleum products in the country. PHOTO: FILE

ISLAMABAD:

The price of petrol is likely to be slashed by Rs1.87 per litre for the second fortnight of June but high-speed diesel (HSD) may become expensive by Rs3.29 per litre, which will pose challenges to consumers and industries alike.

According to sources in the oil industry, the proposed changes in petrol and diesel prices are based on the current rates of petroleum levy and general sales tax (GST).

Pakistan State Oil’s (PSO) exchange rate adjustment for petrol is estimated at Rs3.50 per litre while for diesel it stands at Rs0.31 per litre.

Furthermore, the government imposes Inland Freight Equalisation Margin (IFEM) of Rs4.04 on every litre of petrol and Rs3.79 on diesel.

If approved, the reduction in petrol price will take its ex-depot rate to Rs260.13 per litre compared to the current market price of Rs262.

However, the ex-depot diesel price could soar to Rs256.29 per litre against the current market rate of Rs253. This potential change has sparked concerns among consumers who rely heavily on diesel for transportation and power generation.

The price of kerosene oil is also expected to rise by Rs2.10, reaching Rs166.17 per litre ex-depot while the price of light diesel oil (LDO) may increase by Rs2.48 to Rs150.16 per litre. These adjustments could impact the households relying on kerosene oil for cooking and the industries requiring LDO.

The fluctuations in fuel prices reflect the government’s efforts to strike a balance between stabilising the economy and addressing the energy-sector challenges. The government aims to keep consumer prices at fair levels while managing fiscal constraints. The anticipated decrease in petrol price is expected to provide some relief to motorists as the cost of running vehicles will be slightly reduced. However, the substantial increase in diesel price may put burden on different industries such as transportation, agriculture, and manufacturing, where diesel is a primary source of fuel.

Published in The Express Tribune, June 15^th, 2023.

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