Anticipated Drop in Fuel Prices to Provide Relief for Consumers in Pakistan
Petrol and high-speed diesel (HSD) prices in Pakistan are poised for a noteworthy decrease, with an expected reduction of Rs8 to Rs10 per litre on November 15. This reduction is attributed to the recent decline in international market prices, offering a potential respite for consumers.
Karobar
Despite the global price downturn for both HSD and petrol in the last two weeks, the weakening of the Pakistani rupee against the dollar has somewhat tempered the benefits for consumers. HSD, in particular, has become approximately $9 per barrel cheaper on average, while petrol has witnessed a reduction of $1.
The government, mindful of a maximum petroleum development levy (PDL) limit of Rs60 per litre, has set an ambitious target to collect Rs869 billion in PDL for the fiscal year, aligning with commitments made to the International Monetary Fund (IMF).
Although subject to fluctuations, PDL collection surpassed Rs222 billion in the first quarter ending on Sept 30, 2023. Notably, the persistently high prices of petrol and HSD have contributed to a significant 27% inflation rate in October. The government imposes approximately Rs80 per litre in taxes on both petrol and HSD, including additional levies and duties.
This potential reduction in fuel prices, though influenced by international market trends, is expected to bring relief to consumers grappling with the economic impact of high inflation. The government's commitment to fiscal targets, particularly in PDL collection, adds a layer of complexity to the dynamic relationship between global oil prices and domestic economic considerations.
