ISLAMABAD: The prices of petroleum products are expected to decline by up to Rs14 per litre for the upcoming fortnight, ending March 31, due to fluctuations in global oil prices and import premiums.
However, this relief depends on the government maintaining current tax rates. Officials indicate that authorities are considering absorbing part of the price reduction by increasing the petroleum levy or introducing a carbon tax. This move aims to secure an additional $1 billion in IMF funding for climate adaptation and mitigation.
Based on existing tax structures, the ex-depot price of petrol is projected to drop by Rs14 per litre, bringing it down from Rs255.63 to approximately Rs242. High-speed diesel (HSD) is expected to decrease by Rs8 per litre to around Rs250, while kerosene and light diesel oil could see reductions of Rs10 and Rs7 per litre, respectively.
The decline in petrol prices is attributed to a dip in international crude oil rates, with Brent crude falling by about $3 per barrel over the past 10 days.
Petrol, widely used in private transport, directly impacts middle- and lower-income households. HSD, essential for heavy transport, trains, and agricultural machinery, has a significant influence on inflation, affecting the cost of food and essential goods.
Currently, the government levies around Rs76 per litre in taxes on petrol and HSD, including a petroleum development levy (PDL) of Rs60 per litre. While general sales tax (GST) remains at zero, the government has the flexibility to raise PDL to Rs70 per litre. Additionally, customs duties of Rs16 per litre and distribution margins of Rs17 per litre further contribute to fuel prices.
A final decision on price adjustments will be announced on March 15.
Story by Khaleeq Kiani
