Diesel Prices Take a Dip, Petrol Holds Steady in Interim Government's Latest Move

In a decisive move by the interim government, significant changes in petroleum prices are on the horizon. While petrol remains unwavering, diesel is set to witness a substantial reduction from December 1-15, 2023. This latest decision, announced during the government's fortnightly price review, aims to strike a balance and drive economic activities.

As of the first half of December, the interim government has maintained the petrol price at Rs 281.34 per litre. However, the real shake-up comes with high-speed diesel (HSD), experiencing a significant drop of Rs 7 per litre. The new ex-depot price is now set at Rs 289.71 per litre, offering relief to consumers accustomed to its inflationary impact.

This decision has immediate implications for the Pakistan Economy, impacting both consumers and businesses, as well as the broader business landscape in Pakistan.

Kerosene and Light Diesel Follow Suit:

Widely used in defense and remote areas, kerosene oil sees a reduction of Rs 3.82 per litre, with the new price fixed at Rs 201.16 per litre. Light diesel oil (LDO) joins the trend with a decrease of Rs 4.52 per litre, dropping to Rs 175.93 per litre.

Late-Night Insight from Finance Division:

A late-night statement from the Finance Division unveils the rationale behind the price adjustments. The decision is rooted in recommendations from the Oil and Gas Regulatory Authority (OGRA), providing transparency to the public.

Oil marketing companies estimate a Pakistan State Oil (PSO) exchange rate adjustment, contributing to the calculated prices of petrol and HSD. The government's strategic imposition of a maximum limit on both petrol and HSD, along with a zero rate of GST, adds a layer of fiscal control.

The government expects that the reduction in fuel prices will not only stimulate consumption but also contribute to achieving the PL Rs 869 billion budgetary target for the fiscal year 2023-24. This move is projected to create a ripple effect, fostering an overall boost in economic activities.

October Surge and Future Projections:

Looking back, October 2023 witnessed a 25 percent surge in the demand for petroleum products, reaching 1.26 million tons compared to the previous month. The decrease in prices was a driving force behind this spike, setting the stage for positive future projections.