ISLAMABAD: Keeping in view the recent decline in oil prices in the international market, experts believe that the rate of petrol should have been brought down by Rs25 per litre in Pakistan.
The government, however, will be unable to pass on the benefit of reduced prices of petroleum products to the consumers in the country as the rupee’s downward spiral continues unabated against the dollar and the local unit is making historic lows on the daily basis for the last couple of days.
The petrol price review is due on July 31.
Currently, petrol is being sold at Rs230.24 per litre and diesel at Rs236.
A day earlier, the local currency plunged to a new low against the US dollar, which continued to strengthen for the ninth straight session in the interbank market. The greenback closed at an all-time high of Rs236.02 in the interbank market, up from Rs232.93 a day earlier, as it shed Rs3.09 or 1.31%.
The greenback has gained Rs25 against the rupee since July 15, 2022 when it closed at almost Rs211.
It is pertinent to mention here that the exchange rate depreciation would deprive consumers of any benefit in terms of the reduction in the prices of petroleum products in the coming fortnight.
A top official of an oil company shared that if the average price from July 14 to July 26 is calculated, the price of petrol should have been brought down by Rs25 per litre, with some reduction also possible in the price of diesel.
The exchange loss might push up the prices of diesel and petrol in the coming fortnight along with an increase in the petroleum levy (PL) under the condition put in place by the IMF, the official said.
The international price of crude oil was hovering around $103 per barrel, whereas the global price of petrol was standing around $100 per barrel and diesel price around $120 per barrel.
“Based on these prices, the reduction in local oil prices was possible if the exchange rate was stable,” he said.
He pointed out that final price determination would be done when the government would also consider the exchange loss of Pakistan State Oil (PSO) for the import of crude and petroleum products.
He said that the dollar shortage in the local market has also caused problems as the oil import letters of credit were now settling at over $240 in the market.
Govt slashed petrol price
On July 14, Prime Minister Shehbaz Sharif slashed the price of petrol by Rs18.50 per litre in order to provide maximum relief to the consumers.
Addressing the nation, the premier said that the government had increased the price of petrol after coming into power to meet the conditions laid forth by the International Monetary Fund (IMF), which were agreed by the previous PTI-led government.
Following the announcement by the premier, the finance minister said: “PM has just announced a reduction in the prices of petrol of Rs 18.5 per litre [and] in diesel of Rs 40.54 per litre.”
“The new price of petrol is Rs 230.24 [and] diesel is Rs 236 per litre from [July 15]. Kerosene is reduced by Rs 33.81 to Rs 196.45 [and] LDO is reduced by Rs 37.71 to Rs 191.44, Alhamdulillah,” he wrote on Twitter, sharing a graph of Brent crude oil prices in the international market.