Petrol Prices Likely to Drop in Pakistan After Sharp Decline in Global Oil Rates

The government is expected to reduce petrol and diesel prices in the upcoming fuel price review today, following a notable decline in international crude oil rates that has significantly lowered ex-refinery costs for petroleum products.

Market estimates indicate that both petrol and diesel have seen prices drop in global and local ex-refinery pricing, which could pave the way for fuel price cuts in the country. But the final call will be made following a meeting between the Prime Minister and the economic team, who will weigh public relief against revenue needs.

Ex-Refinery Prices Show Sharp Decline

A recent estimate showed that the ex-refinery price of diesel has fallen by Rs. 31 per litre, while petrol has become cheaper by Rs. 8.54 per litre.

The ex-refinery price of petrol is reportedly down from Rs. 277.06 per litre to Rs. The price of oil at 268.52 per litre is a reflection of the global oil markets which is declining. Though this relief, there was an increase of customs duty on petrol by Rs. 2.86 per litre (from Rs. 22.75 to Rs. 25.61)—may partially offset the benefit for consumers.

Global Market Trends Support Price Cut

International crude prices have also moved downwards, but not in a clear manner. Petrol premiums edged up $2.90 per barrel, from $17.44 to $20.34, but the petrol benchmark price fell $6.49 per barrel, to $138.08.

Diesel witnessed a sharper decline in global markets. Its ex-refinery price in Pakistan’s calculations fell from Rs. 322.28 per litre to Rs. 291.37 per litre, while international diesel prices dropped significantly by $17.61 per barrel, sliding from $169.10 to $151.40.

Final Decision Pending Government Approval

The government will reach a final decision on petroleum prices after considering the fiscal impact and seeking input from economic authorities, officials said. The amount of relief that passes through to consumers will depend on revenue goals and current tax regimes.

The price cut would offer some relief to poor citizens who are under serious pressure due to inflation, and could affect transport fares and commodity prices throughout the country.