By Staff Reporter
KARACHI: Pakistan is set to slash fuel prices by as much as 2.2% starting Thursday, offering a measure of relief to consumers and the transport sector amid volatile global oil markets.
The government plans to cut the ex-depot price of gasoline by Rs4.59 a liter, or about 1.8%, to Rs248.58 from Rs253.17, according to estimates from oil marketing companies and government officials. High-speed diesel, a key fuel for trucks, buses and agricultural machinery, is expected to drop Rs2.70 a liter to Rs254.38 from Rs257.08.
Kerosene prices are projected to fall Rs1.82 a liter to Rs169.06 from Rs170.88, while light diesel oil may decline Rs2.08 a liter to Rs144.10 from Rs146.18. The adjustments, effective for the fortnight through Jan. 31, reflect recent dips in international crude benchmarks driven by supply shifts and geopolitical tensions.
Retail prices, which include dealer margins, are typically a few rupees higher. Gasoline currently sells for more than Rs254.40 a liter at pumps, while diesel goes for about Rs258.
The Oil and Gas Regulatory Authority and relevant ministries are due to finalise recommendations on Wednesday for the Petroleum Division, which will announce the changes the same day. The estimates assume no shifts in current taxes, including a petroleum levy and customs duty totalling Rs82.12 a liter on gasoline and Rs77.91 on diesel—figures that make up roughly a third of pump prices.
Global oil markets have been whipsawed by US moves to tighten control over Venezuelan crude exports, adding to broader uncertainties around supply and demand. Brent crude, the international benchmark, is forecast to average below $60 a barrel this year, down from a nearly 20% slide in 2025. West Texas Intermediate may hover around $50, with risks of further declines. Internationally, refined product prices have eased, with gasoline quoted at $5.03 a barrel and high-speed diesel at $3.20. That’s helped pull down local rates, though Pakistan’s fuel costs remain sensitive to currency fluctuations and import duties.
This marks the second straight cut after the government trimmed prices on Jan. 1. Gasoline fell Rs10.28 a liter then, from Rs263.45, while diesel dropped Rs8.57 from Rs265.65. Those reductions followed a Rs27-a-liter surge between May and August last year, which transporters used to justify fare hikes that they haven’t rolled back despite subsequent declines of Rs17 to Rs20 since Oct. 1.
Lower fuel costs could ease inflationary pressures, particularly on food prices, as diesel powers much of the supply chain for vegetables and other staples. Gasoline, used mainly in cars, motorcycles and rickshaws, directly affects middle- and lower-income households. Still, with the government relying on fuel taxes to meet fiscal targets, deeper cuts might strain budgets if global prices rebound.
Copyright © 2021 Independent Pakistan | All rights reserved
