Petrol Price in Pakistan May Be Reduced From October 16

The Petrol Price in Pakistan may see a reduction of Rs. 11 per litre, while the Price of High-Speed Diesel (HSD), Kerosene, and Light Diesel Oil (LDO) are expected to go up by Rs. 5 to Rs. 12 per litre from October 16 for the next fortnight, despite massive gains made by the Pakistani Rupee against the US Dollar (USD to PKR).

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According to Dawn, if the Federal Government maintains the current tax rates, the ex-depot Price of Petrol may be cut by Rs. 10.75 to Rs. 214 per litre, while the Price of High-Speed Diesel (HSD) is expected to increase by Rs. 11.50 to Rs. 247 per litre. Likewise, the Prices of Kerosene and Light Diesel Oil (LDO) are estimated to rise by Rs. 4.50 and Rs. 7.50 to Rs. 196 and Rs. 194, respectively.

The report adds that benchmark international crude oil prices had dropped the last couple of weeks but refining capacity constraints had increased the refining margins and premiums on High-Speed Diesel (HSD) during the same period, which has resulted in higher cost impact on HSD import to Pakistan.

Meanwhile, the prices of crude oil in the international market have started increasing this week after production curs announced by major oil exporting countries but these would impact Petrol Prices in Pakistan during the next fortnight, starting November 1.

Furthermore, an official told Dawn that depending on the Finance Minister Ishaq Dar’s comfort level in Washington, the Government would maintain the prices of both petrol and HSD through proportionate adjustments in the petroleum development levy (PDL) on these two products.

In this scenario, the Petroleum Development Levy (PDL) on petrol would reach the maximum level as agreed upon with the International Monetary Fund (IMF), while the gap on HSD would increase drastically.

It is pertinent to mention that General Sales Tax (GST) is currently zero on on all petroleum products, including Petrol, HSD, Kerosene and LDO against normal GST of 17 percent. However, the Government is charging Petroleum Levy (PL) of Rs. 32.42 per litre on Petrol, Rs. 12.58 per litre on HSD, Rs. 15 on Kerosene and Rs. 10 on LDO.

Under the IMF programme, the Government had agreed on a monthly PDL increase of Rs. 5 per month for both fuels, including Petrol and High-Speed Diesel (HSD) until it reaches Rs. 50 in January for Petrol and April for Diesel to collect Rs. 855 billion during the current fiscal year.