Fuel prices may be reduced by PKR 10 per liter in Pakistan
Lower import costs and favorable exchange rate movements point to the possible cut
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
Motorcyclists line up at a fuel station in Karachi, Pakistan
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Lower import costs and favorable exchange rate movements point to a possible PKR 10 per liter reduction in fuel prices in Pakistan.
However, this reduction is only likely if the government does not increase the petroleum development levy to improve tax collection.
Consumers may see a drop in fuel prices in the first half of August as global trends and foreign exchange rates lead to an adjustment in fuel import costs.
According to forecasts, significant reductions in petrol are anticipated, while diesel rates are expected to show a paltry decrease.
The average Freight on Board (FOB) cost for petrol per barrel is forecasted to decline from $84.88 in the second fortnight of July to $79.57 in early August. The premium on petrol is also expected to contract, dropping from $9.61 to $6.74 per barrel, while freight charges decrease marginally.
The cost per liter in USD is forecasted to fall from $0.53 to $0.50, translating into a decrease in local terms from PKR 151.87 to PKR 142.65.
With minor adjustments in duties and incidentals factored in, the derived ex-refinery price could decrease by over PKR 10 per liter in August.
However, the decline could be nullified if government raises PDL, which currently stands around PKR 74.51 on diesel and PKR 75.50 on petrol. This could be raised by PKR 5 to 10 per liter, which would ultimately increase the prices for consumers.
The forecasted ex-refinery price for HSD suggests a reduction from PKR 184.79 to PKR 180.33 per liter, offering modest relief to consumers.
The final prices for consumers will depend on policy decisions by the government and regulators, who may factor in inflationary pressures and subsidy adjustments.
Oil prices are declining as lingering uncertainty over upcoming U.S. tariffs weighs on investor sentiments ahead of the August 1 deadline.
As the deadline nears, the European Union is reportedly considering retaliatory measures. Meanwhile, U.S. President Donald Trump on Tuesday imposed a 15% reciprocal tariff on Japanese exports. In response, Japan lowered auto duties and further opened its domestic markets to American goods.
Brent crude for September delivery was quoted at $68.66 per barrel as of 2:55 p.m. ET, with prices settling within a narrow $68.52–69.52 range over the past six sessions, reflecting tepid market conviction.
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