Petroleum prices likely to drop by Rs10 following low global rates

Islamabad: Petrol and diesel prices are expected to fall by about Rs10 per liter for the next 15 days ending April 30 due to the fall in global rates.

The relief is subject to changes in tax rates, reportedly. A government official said the government was also considering not reducing the prices of petroleum products significantly, which could boost demand. Meanwhile, refineries are demanding that the government impose GST on petroleum products.

The government has also given an affidavit to the IMF to impose a carbon levy of about Rs5 per liter as part of the $1.3 billion Flexibility and Sustainability Facility, effective from July 1.

It is also reported that based on the current tax rates, the ex-depot price of petrol was estimated to decrease by about Rs10, which is subject to the final calculation on April 15, after which the price of high-speed diesel (HSD) will be reduced by Rs9 per liter.

The estimate of the reduction in petrol prices comes after a decline of about $6 per barrel in the international price of petrol and about $5 per barrel in HSD during the last two weeks.

The ex-depot price of petrol is currently Rs254.63 per liter and high-speed diesel is Rs258.64 per liter.

The government is currently charging around Rs86 per liter on both petrol and diesel. Although the General Sales Tax (GST) on all petroleum products is zero, the government is charging a Petroleum Development Levy of Rs70 per liter on petrol, diesel, and high-octane products, which generally affects the public.

The government collects around Rs16 per liter in customs duty on petrol and HSD, irrespective of their local production or imports. In addition, around Rs 17 per liter in distribution and sales margin going to oil companies and their dealers.