Pakistani consumers may soon see relief at the pump, as the recent drop in global crude oil prices could lead to a reduction in petrol and diesel prices starting August 16. The Oil and Gas Regulatory Authority (OGRA) is set to finalize its price calculation by August 15, with the Ministry of Finance expected to approve the new rates soon after.
Over the past 11 days, global crude oil prices have witnessed a notable decline, with US crude dropping by $5.71 per barrel from $69.26 to $63.48. Similarly, British Brent crude has fallen by $5.72 per barrel, from $71.70 to $65.98. This sharp drop in global oil prices could translate into significant price adjustments for petroleum products in Pakistan.
Market estimates suggest that the ex-refinery price of diesel in Pakistan may decrease by Rs10 to Rs12 per litre, while petrol could see a slight reduction of up to Re1 per litre. OGRA is expected to send its final price calculation to the Ministry of Finance on August 15, after which the federal government, with the prime minister’s approval, will issue a formal notification of the revised prices. These new rates will take effect from August 16 to August 31.
Under the current regulatory framework, the Pakistani government has the authority to adjust petroleum prices in response to global market trends. In late July, the government revised petrol and diesel prices for the fortnight starting August 1. Petrol prices were reduced by Rs7.54 per litre, bringing the cost down to Rs264.61 per litre, while diesel prices were increased by Rs1.48 per litre to Rs285.83 per litre.
Despite the drop in global oil prices, the recent price cuts were partially offset by an increase in petroleum levies. The levy on petrol was raised by Rs2.55 per litre, bringing the total levy to Rs78.02 on petrol and Rs77.01 on diesel. Additionally, the climate support levy of Rs2.50 per litre remains in effect on both fuels, contributing to the overall cost burden on consumers. Furthermore, dealer margins and freight margins have also seen increases.
As global oil prices continue to fluctuate, Pakistani consumers are hoping that the upcoming reduction in fuel prices, though modest, will provide some respite from the rising costs of living.
