The price of high-speed diesel (HSD) in Pakistan is expected to decrease by Rs5.41 per litre effective from May 1, 2023, due to the weakening of global oil prices. This is good news for the agricultural sector as well as the transportation sector, which relies heavily on diesel.
The Kharif crop planting season is already underway, and any decrease in diesel prices will have a positive impact on farmers who have been struggling with high oil prices.
The government is likely to pass on this relief to consumers in the midst of the current political chaos. However, the petroleum levy, which is already at its maximum of Rs50 per litre, cannot be increased to provide a boost to state revenues.
As of now, the ex-depot price of HSD is Rs293 per litre, which is expected to be reduced by Rs5.41 to Rs287.59 under the upcoming fortnightly review.
The price of petrol, used in motorbikes and passenger cars, and an alternative to compressed natural gas (CNG), is also likely to decrease by Rs3.86 to Rs278.14 per litre. Similarly, the price of kerosene oil, used in remote areas for cooking purposes, is expected to be reduced by Rs8.09 to Rs177.98 per litre, and the price of light diesel oil (LDO), consumed in industries, is expected to fall to Rs163.10 per litre with a decrease of Rs11.58.
| Fuel | Current Price | Expected Price from May 1, 2023 | Decrease in Price |
|---|---|---|---|
| High-speed diesel (HSD) | Rs293 per litre | Rs287.59 per litre | Rs5.41 per litre |
| Petrol | Rs282 per litre | Rs278.14 per litre | Rs3.86 per litre |
| Kerosene oil | Rs186.07 per litre | Rs177.98 per litre | Rs8.09 per litre |
| Light diesel oil (LDO) | Rs174.68 per litre | Rs163.10 per litre | Rs11.58 per litre |
| JP-1 (local) | - | - | Rs8.09 per litre |
| JP-4 | - | - | Rs6.98 per litre |
| JP-8 | - | - | Rs8.09 per litre |
Prices of JP-1 (local) and JP-8 may drop by Rs8.09 per litre each. On the other hand, JP-4 is likely to become cheaper by Rs6.98 per litre. Jet fuel is mainly used in the aviation industry.
The revision of petroleum prices takes into account the currency exchange rate, which has dropped by Rs2.57 against the rupee to Rs284.09 since April 16. Additionally, prices are based on the current petroleum levy and general sales tax. Prices will also depend on the Platts index from April 16 to 26, with only two days of data remaining.
The inland freight equalisation margin (IFEM) is also applied, which is Rs2.26 per litre on petrol and Rs4.38 per litre on HSD. The IFEM is a charge that oil marketing companies receive for transporting fuel to different parts of the country.
If the government decides to defer Pakistan State Oil’s (PSO) currency exchange rate adjustment, the ex-refinery petrol is expected to become cheaper by Rs15.86 per litre, from Rs216.74 to Rs200.88 per litre. Similarly, the HSD price may fall by Rs29.41 per litre, from Rs234.06 to Rs204.65 per litre.
It is crucial to note that petroleum prices are subject to change due to various factors such as global oil prices, currency exchange rates, and government policies. However, these upcoming price reductions will bring much-needed relief to consumers, particularly the farmers who are struggling to make ends meet.
The reduction in diesel prices in Pakistan is expected to provide relief to various sectors, including agriculture and transportation, which rely heavily on diesel. The reduction in diesel prices will also have a positive impact on consumers in remote areas who rely on kerosene oil for cooking.
The decrease in petroleum prices is a result of the weakening of global oil prices, which is a welcome relief for the people of Pakistan.
Read More: Latest Petrol Prices in Pakistan 2023
