The Pakistani government is likely to cut prices of petroleum products for the next fortnight following a drop in global crude oil prices.
Petrol prices may decrease by PKR 2.50 per liter, while diesel prices could drop by PKR 8 per liter. These calculations reflect a drop in the ex-refinery price of petrol by PKR 1.75 per liter and diesel by PKR 6.50 per liter.
Global petrol prices fell by $0.81 to $89.70 per barrel, while diesel prices decreased by $3.74 to $92.74 per barrel.
However, analysts suggest that the government might raise the petroleum development levy by PKR 5 on petrol and PKR 10 on diesel to plug a revenue shortfall, though this is considered a remote possibility.
During the first seven months of the current fiscal year, the revenue shortfall was approximately PKR 386 billion, with total tax collection was near PKR 5,623 billion.
The petroleum development collection for the first six months of the current financial year was PKR 549 billion, compared to PKR 473 billion in the same period last year, according to finance ministry data.
In the 2023-24 fiscal year, net petroleum collection was around PKR 1,019 billion, with a target of PKR 1,281 billion set for 2024-25. The collection from the petroleum levy has slowed due to lower demand from industries.
The government faces the delicate task of potentially increasing the rate from PKR 60 to PKR 70 per liter, a move that could accelerate inflation.
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