ISLAMABAD: Pakistan’s federal government on Sunday announced significant reductions in fuel prices slashing the petrol price by Rs10 per litre and high-speed diesel (HSD) price by Rs13.6 per litre, respectively, effective from September 16. Additionally, light diesel prices have been cut by Rs12.12 per litre, and kerosene prices have been lowered by Rs11 to Rs15 per litre, local media reported.
The price adjustments come following the approval of Prime Minister Shehbaz Sharif, according to media reports. These changes are attributed to a notable decline in oil prices in the international market, which have dropped by 8.5% from USD 79.39 per barrel on August 30, 2024, to USD 72.67 per barrel.
This shift in global energy markets is largely due to the Organization of the Petroleum Exporting Countries (OPEC) revising its global oil demand forecast, which has led to decreased demand and subsequent price reductions.
Over the last three price adjustments, petrol and diesel prices in Pakistan have decreased by PKR 16.50 per litre and PKR 20.88 per litre, respectively. This reduction marks the fourth consecutive decline in fuel prices, with projections indicating further decreases of PKR 13.12 per litre for petrol and PKR 14.39 per litre for diesel.
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In response to the international price drop, the Oil and Gas Regulatory Authority (Ogra) had previously submitted a summary to the prime minister recommending a price reduction. From September 1 to September 14, crude oil prices in the international market fell by Rs8 to Rs12, with the price dropping from approximately $90 per barrel in April 2024 to around $70 per barrel in September, the lowest in the past six months.
Despite the potential for a more substantial decrease, the government has implemented a moderate reduction to maintain higher revenue figures. Pakistan’s fuel pricing formula, which is determined by the government, includes a petroleum levy of about Rs70 per litre, aimed at collecting Rs1.28 trillion in revenue for the fiscal year.
The pricing structure also includes approximately Rs78 per litre in taxes and duties, with about Rs8 per litre in customs duties and Rs17 per litre in distribution and sale margins for oil companies and their dealers.
