Petrol and diesel prices in Pakistan are projected to decrease by around Rs10 per litre for the upcoming fortnight ending April 30, owing to a notable decline in international oil prices. However, this potential relief for consumers hinges on the government maintaining the current tax structure.
According to official sources, the government is contemplating whether to allow the full benefit of the price drop to reach consumers. A significant reduction in fuel prices could drive up demand, which authorities may want to avoid. At the same time, local refineries are urging the government to reintroduce general sales tax (GST) on petroleum products.
The government has already committed to the International Monetary Fund (IMF) to introduce a Rs5 per litre carbon levy starting July 1, as part of the $1.3 billion Resilience and Sustainability Facility.
Based on current tax rates, sources estimate that the ex-depot price of petrol may fall by approximately Rs10 per litre, with high-speed diesel (HSD) expected to see a Rs9 per litre reduction. These estimates are based on a drop of about $6 per barrel in global petrol prices and a $5 per barrel decline in HSD prices over the past two weeks.
As of now, the ex-depot price of petrol is Rs254.63 per litre, while HSD stands at Rs258.64 per litre.
Despite zero GST on petroleum products, the government continues to impose a substantial Rs70 per litre petroleum development levy on petrol, diesel, and high-octane fuels. Additionally, a Rs16 per litre customs duty is applied on both locally produced and imported petrol and diesel. Oil companies and dealers also receive approximately Rs17 per litre in distribution and sales margins.
The total government charges on petrol and diesel currently amount to around Rs86 per litre.
