Petrol Price in Pakistan Today May Drop by Rs2.95 per Litre
The proposed price hike and tax imposition aim to address the financial issues of refineries, OMCs, and dealers, and to ensure the sustainability of the oil supply chain, with the government seeking to balance the interests of various stakeholders in the oil industry.
Petroleum prices in Pakistan are expected to decrease in the upcoming fortnightly review for May 2025, with sources suggesting that the petrol price may drop by Rs2.95 per litre, high-speed diesel by Rs6.80 per litre, and kerosene oil by Rs7.16 per litre. The Oil and Gas Regulatory Authority (OGRA) is set to send a summary to the Ministry of Finance for revising petroleum prices.
The Petroleum Division has requested Prime Minister Shehbaz Sharif's approval to increase oil margins for oil marketing companies (OMCs) and dealers to recover losses of Rs34 billion incurred by refineries. The division has proposed a Rs1.18 per liter increase in margins for OMCs and dealers, and has also suggested allowing the oil industry to charge Rs1.87 per liter through the Inland Freight Equalisation Margin (IFEM) to recover the losses.
The Economic Coordination Committee (ECC) has agreed to the proposals, but has sought the prime minister's consent. The ECC has also agreed to allow the oil industry to charge Rs1.87 per liter through IFEM to recover the losses, and has suggested that the government impose a 3-5% sales tax on petroleum products in the upcoming budget. However, the government is expected to approve a price hike of over Rs 4 per liter in petrol and diesel to generate Rs 35 billion.
The funds will support oil refineries, address sales tax challenges, and raise profit margins of Oil Marketing Companies (OMCs). The total impact of the price hike will be Rs 4.12 per liter, comprising Rs 1.87 per liter for refineries and OMCs' unadjusted sales tax, Rs 1.13 per liter for OMCs margins, and Rs 1.12 per liter for petroleum dealers margins.