Petrol seen falling marginally as government weighs higher petroleum levy to curb circular debt
People get their vehicles refueled at a station in Karachi, Pakistan
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Pakistan may reduce diesel prices by about PKR 13 per liter when it announces revised petroleum product prices late Monday, officials familiar with the calculations said, as falling global oil prices create space for fiscal adjustments.
Petrol prices are expected to decline by around PKR 2 per liter for the next fortnight, according to preliminary estimates.
The government reviews fuel prices every two weeks and is scheduled to notify the new rates Monday night.
Data shows global diesel prices fell by $7 per barrel during the review period to about $84, while petrol prices dipped only slightly — by about 50 cents — to $79.25 per barrel.
Despite the decline, officials said the government is considering raising the petroleum development levy (PDL) on diesel by up to PKR 5 per liter to generate additional revenue. The move is aimed at helping reduce Pakistan’s gas-sector circular debt, which has climbed beyond PKR 3.3 trillion.
Currently, the petroleum development levy stands at about PKR 75.41 per liter on petrol and PKR 79.61 per liter on diesel.
In addition, the government may factor in about PKR 1.28 per liter in extra costs to accommodate higher margins for oil marketing companies and dealers. The Economic Coordination Committee of the Cabinet earlier this week approved an increase of 61 paisas per liter for oil companies and 67 paisas per liter for fuel dealers.
Prices of other petroleum products are also expected to decline. The ex-depot price of kerosene is estimated to fall by about PKR 11.50 per liter, or 6%, while light diesel oil (LDO) could drop by about PKR 10 per liter, also a 6% reduction.
Kerosene currently sells at PKR 192.86 per liter, while LDO is priced at PKR 173.77 per liter.
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