On September 1, the government lowered the prices of petrol and high-speed diesel (HSD) by Rs1.86 and Rs3.32 per litre, respectively, for the first two weeks of the month.
Massive drop in petrol prices expected in Pakistan from Sep 16. A significant drop in petrol prices is expected in Pakistan starting September 16, following the scheduled review on September 15.
In the upcoming review scheduled for the next fortnight, petrol and High-Speed Diesel (HSD) prices in Pakistan are expected to decrease by Rs10-11 per litre.
According to media, international prices for petrol and High-Speed Diesel (HSD) have decreased by approximately $5 per barrel.
This drop is expected to be reflected in petroleum prices in Pakistan, provided that the petroleum levy remains unchanged and the final exchange rate calculations and existing tax rates are taken into account.
On September 1, the government lowered the prices of petrol and high-speed diesel (HSD) by Rs1.86 and Rs3.32 per litre, respectively, for the first two weeks of the month.
If the price of petrol and HSD is reduced by Rs10 per litre, the new price of petrol in Pakistan will be Rs249.10 from September 16, while the price of HSD will be Rs252.75.
Petrol is primarily used in private transport, small vehicles, rickshaws, and two-wheelers, and it directly affects the budget of the middle and lower middle classes. On the other hand, most of the transport sector runs on HSD. Its price is considered inflationary as it is mainly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube wells and threshers and particularly impacts the prices of vegetables and other eatables. The drop in petroleum prices is seldom reflected in fares and prices of essential commodities.
The government has jacked up the maximum limit of petroleum levy to Rs70 per litre in the finance bill to collect Rs1.28 trillion in the next fiscal year against Rs1.019tr collection during the last fiscal year, almost Rs150bn higher than the Rs869bn budget target.
Currently, the government is charging about Rs78 per litre tax on petrol and HSD. Although the general sales tax (GST) is zero on all petroleum products, the government charges Rs60 per litre PDL on both products, which usually impacts the masses. The government also charges about Rs18 per litre custom duty on petrol and HSD, irrespective of their local production or imports. In addition, about Rs17 per litre distribution and sale margins are going to oil companies and their dealers.
On the other hand, it charges Rs50 per litre on light diesel and high octane blending components and 95RON petrol used by the wealthy in luxury imported vehicles.
Petrol and HSD are the major revenue spinners, with their monthly sales of about 700,000-800,000 tonnes compared to just 10,000 tonnes demand for kerosene.
