ISLAMABAD: Following two consecutive price hikes, the prices of petrol and high-speed diesel (HSD) are anticipated to decrease by approximately Rs3 and Rs8.50 per litre, respectively, from August 1. This expected drop is due to a decline in international market prices and import premiums.
According to sources, the international market prices for petrol and HSD have fallen by about $2 and $3 per barrel over the last fortnight. With final calculations and current tax rates, petrol prices are projected to decrease by Rs2.90 per litre and HSD by Rs8.50 per litre.
Officials noted that the average price of petrol in the international market has dropped to $87.50 from $89.50 per barrel. Similarly, HSD prices decreased to $94 from about $96.93 per barrel over the same period.
Additionally, the import premium on both products has declined. For petrol, it dropped to $8.80 from $9 per barrel, and for HSD, it fell to $5 from $6.50 per barrel. The exchange rate movement remained stable during the fortnight.
Despite these potential price reductions, the government has increased the maximum petroleum levy to Rs70 per litre in the current Finance Bill, aiming to collect Rs1.28 trillion in the next fiscal year, compared to Rs960 billion collected last fiscal year.
Currently, the ex-depot price of petrol is Rs275.60 per litre, and HSD is Rs284 per litre. If the new rates take effect, petrol would still be above Rs272 per litre, while HSD would be close to Rs275 per litre, assuming no increase in the petroleum levy.
Petrol, used predominantly in private transport and small vehicles, directly affects the budget of middle- and lower-middle-class households. HSD, used mainly in heavy transport vehicles, influences inflation as it affects the prices of essential goods like vegetables and other commodities.
However, decreases in petroleum prices are rarely reflected in transportation fares and essential commodity prices. Recently, petrol and HSD prices increased by Rs7.45 and Rs9.56 per litre on June 30, followed by further hikes of Rs9.99 and Rs6.18 per litre, respectively, on July 16. In total, prices rose by Rs17.44 for petrol and Rs15.74 for HSD in July. Conversely, between May 1 and June 15, the prices of both products had decreased by about Rs35 and Rs22 per litre, respectively.
The government imposes approximately Rs78 per litre in taxes on both petrol and HSD, with a petroleum development levy of Rs60 per litre impacting consumers, despite GST being zero on all petroleum products.
Story by Khaleeq Kiani
