The federal government is considering a reduction in petroleum product prices, with petrol and diesel rates potentially being slashed by up to Rs 5 per litre, according to sources on Tuesday.
The decline in crude oil prices in the global market over the past two weeks may lead to a reduction of Rs 5.04 in petrol prices and up to Rs 8 per litre in diesel prices, the sources added.
Moreover, it is expected that kerosene oil and light diesel oil (LDO) prices will also be lowered by Rs 8.03 and Rs 5.4 per litre, respectively.
The Oil and Gas Regularity Authority (OGRA) has yet to submit its summary, and the final decision on any reduction in petroleum product prices will be made by the Finance Ministry after consultation with the prime minister.
If the anticipated price reduction materializes, petrol could drop from Rs 293.94 to Rs 288 per litre, while diesel could decrease from Rs 290.38 to Rs 282.38 per litre for the next fortnight.
Similarly, the new rates for kerosene oil and LDO are expected to be Rs 85.05 and Rs 168.97 per litre, respectively, down from Rs 93.08 and Rs 174.34 per litre.
The new petroleum, oil, and lubricant (POL) prices have been calculated based on the current government taxes, with the internal freight equalization margin remaining at Rs 6.75 per litre for petrol and Rs 3.71 per litre for high-speed diesel (HSD).
The government is also charging a petroleum levy (PL) of Rs 60 per litre on petrol and diesel, while dealers are receiving a margin of Rs 8.64 per litre on both products. Additionally, district margins (including extra margins) are being charged at Rs 7.87 per litre each on petrol and diesel.
It is worth noting that on April 15, the government had raised petrol and diesel prices by Rs 4.5 and Rs 8.1 per litre, respectively.
Every 15 days, the government reviews and adjusts petroleum product prices in response to changes in global oil prices and the value of the local currency.
The government considers factors such as expected fuel consumption and supply costs of Pakistan State Oil, as well as monthly tax targets, when determining petroleum product prices.
