It’s time for some good news at the fuel pump! After what felt like an endless climb, the prices of petrol and diesel are set to drop in Pakistan. This upcoming fortnight, ending August 15th, you can expect to see a noticeable dip in what you pay at the pump.
Sources indicate that petrol prices could fall by around Rs. 9 per litre, which is a 3.3% reduction. For high-speed diesel (HSD), we’re looking at a decrease of approximately Rs. 3.50 per litre, or 1.3%. While these are estimates based on current figures, they offer a much-needed breather for consumers.
Why Are Prices Falling?
Several factors are contributing to this positive shift:
- Softer International Oil Prices: Globally, the cost of crude oil has eased up a bit over the last two weeks.
- Reduced Import Premiums: The premium paid to import petrol has significantly decreased, almost by a third! This drop, from about $9.70 to $6.75 per barrel, is partly due to a reduction in regional tensions.
This is a welcome change, especially considering that petrol prices have gone up by Rs. 20 per litre since mid-May, with HSD seeing an even steeper rise of almost Rs. 28 per litre in the same period.
While petrol and diesel are set to become cheaper, it’s not all good news on the fuel front. Kerosene and Light Diesel Oil (LDO) are projected to become more expensive, with expected increases of Rs. 3.50 and Rs. 2.25 per litre, respectively.
How Does the Govt Play Its Part?
Even with these price adjustments, the government continues to collect significant revenue from petroleum products. Currently, about Rs. 98 per litre on both petrol and diesel is collected through various levies. It’s important to note that this is happening while the general sales tax (GST) on all petroleum products remains at zero.
These levies include:
- Petroleum Levy and Climate Support Levy (CSL): Rs. 77.01 per litre on diesel and Rs. 78.02 per litre on petrol and high-octane products, with Rs. 2.25 per litre specifically for CSL.
- Customs Duty: Rs. 20-21 per litre is charged on both imported and locally refined fuels.
- Distribution and Dealer Margins: These add another Rs. 17 per litre to the cost.
Petrol and HSD are crucial revenue streams for the government, with combined monthly sales of 700,000-800,000 tonnes. In the last fiscal year (2024-25), the government collected a whopping Rs. 1.161 trillion through petroleum levy, and it anticipates a 27% increase to Rs. 1.470 trillion in the current fiscal year.
What are your thoughts on these price changes? Share your perspective in the comments below!
