Pakistan expected to cut petrol, diesel prices for third straight weekly review
Industry estimates show petrol may fall by PKR 8.54 per liter and high-speed diesel by PKR30.91 as global oil prices and import premiums decline
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)
Pakistan is expected to reduce petroleum product prices for the third consecutive fortnight from May 29 following a sharp decline in global oil prices and lower import premiums, according to industry estimates released Wednesday.
According to provisional calculations circulating in the oil sector, the ex-refinery price of petrol is expected to decline by PKR 8.54 per liter, while high-speed diesel (HSD) may see a steeper cut of PKR 30.91 per liter in the upcoming pricing cycle.
The estimates are based on average international prices recorded between May 25 and May 29 and exclude any exchange-rate adjustments.
Petrol ex-refinery prices are projected to fall to PKR 268.52 per liter from PKR 277.06 previously, while diesel ex-refinery prices are expected to decline to PKR 291.37 per liter from PKR 322.28.
The expected reduction follows two consecutive price cuts announced by the government earlier this month. In the last fortnightly review, petrol prices were reduced by PKR 15.39 per liter and HSD prices by PKR 7.88 per liter.
Before that, authorities had cut petrol prices by PKR 2 per liter and diesel prices by PKR 2.50 per liter amid easing global crude markets.
Global oil prices have remained under pressure in recent weeks because of concerns over slowing demand growth, improving supply expectations, and uncertainty surrounding the pace of economic recovery in major economies.
Benchmark Brent crude has traded lower compared with levels seen earlier this year, while refined fuel prices in the international market have also weakened. Market participants said lower freight costs and reduced premiums on imported fuels further contributed to the expected decline in domestic petroleum prices.
Industry officials said the sharp drop in diesel prices mainly reflected a significant decline in global high-speed diesel prices, which fell by more than USD 17 per barrel during the review period.
The government will make the final decision on petroleum prices after reviewing recommendations from the Oil and Gas Regulatory Authority and relevant ministries.
The new prices, once approved, will take effect May 29.
Analysts said lower fuel prices could provide some relief to inflation and transport costs, although the government’s reliance on the petroleum levy to meet fiscal targets under the International Monetary Fund program may limit the extent of future reductions.
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