Pakistani Petrol Prices May Decrease by Up to Rs5 per Litre

The demand for reducing petrol prices by Rs30 per litre in Pakistan have been made by Jamaat-e-Islami's chief, Hafiz Naeemur Rehman, to the government, citing lower global crude oil prices. Rehman urged the government to eliminate the additional tax of Rs60 per litre, calling it an "illegitimate" tax that hampers economic growth.

As of now, prices for petrol and high-speed diesel (HSD) are expected to decrease in the upcoming fortnight starting November 1, with a decrease of Rs2 to Rs3 per litre. The current ex-depot prices for petrol and HSD stand at Rs243.03 per litre and Rs251.29 per litre respectively. The prices may move down to Rs240 to Rs241 per litre, a reduction of up to Rs3.50 per litre, largely attributed to a decline in global crude oil prices with the average price dropping from $77.5 per barrel to $76 per barrel. The adjustment of internal equalisation freight margin (IEFM) might made to affect diesel prices, resulting in a possible increase of Rs0.26 per litre while kerosene oil and light diesel prices may see reductions of Rs1.42 and Rs3.32 per litre, respectively, if the IEFM is adjusted.

The move comes as part of a routine price hike review by the government for the forthcoming fortnight. The decision is yet to be finalised but sources suggest, on the advice of Ministry of Energy and Petroleum Division, an adjustment in prices is inevitable given the slight Fall in global oil prices in recent days. The lifting of additional IEFM may lead to losses for oil marketing companies and refineries, and as the current policy comes to an end, this would be the most fitting decision, primarily driven by industry trends and market conditions.

The decrease in global crude oil prices, despite fluctuating, is a boon to the country at the time of burgeoning economic revival and shrinking deficits. If the government supports the cut in prices of Petrol up to the level demanded by Rehman and followed the lobby for the prices of HSD, it may address economic growth and stability. So far, the path has been progressive, and it needs to be toned down in a manner that contributes positively to country's GDP in future.