ISLAMABAD: Despite higher import tariffs, petrol and high-speed diesel (HSD) prices are predicted to fall by roughly Rs15 and Rs9 per litre on May 15 as a result of a notable decline in the global market.
According to knowledgeable sources, during the past two weeks, the price of gasoline and HSD has decreased by approximately $8.7 and $4.3 per barrel, respectively, on the global market. The final inland freight equalization margin (IFEM) computation will determine how much petrol and HSD will cost per litre. A reduction of Rs. 14.75 and Rs. 8.50, respectively, is predicted for petrol.
In the last two weeks, the import premium on gasoline rose by over 7% to $10.30 per barrel. Prior to April 30, it had fallen in two stages, from $13.50 per barrel in March to $9.60 per barrel. However, the rupee also appreciated against the dollar during the fortnight, moving from Rs278.65 to Rs278.45, or approximately 20 paise. The expected net effect is a drop in petrol prices of almost Rs15 per litre, from the current figure of Rs288.49.
In the global market, the price of HSD also decreased by almost $4.3 per barrel, while the benchmark Pakistan State Oil (PSO) continued to pay the same $6.50 import premium per barrel. Therefore, from the current rate of Rs281.96 per litre at the depot stage, the HSD rate was expected to be down by Rs8.50-9.40 per liter, subject to final exchange rate adjustment and IFEM in pricing.
Local prices are predicted to decline for the second time in two weeks despite an increase in import premiums.
According to officials, the price of gasoline on the global market fell to $88 per barrel from $96.6 per barrel earlier, while the price of hydrogen persisted at $93 from $97.5 per barrel.
With effect from May 1, the cost of gasoline and HSD decreased by Rs5.63 and Rs8.42 per litre, respectively.
The highest legal amount that can be charged on gasoline and HSD is Rs60 per litre, which has already been reached by the government. In the first nine months that ended on March 31, the government brought in Rs720 billion. The government had set a budget objective to collect Rs869bn as petroleum levy for the current fiscal year in accordance with the obligations made to the International Monetary Fund (IMF).
The main cause of the unparalleled inflation has been the high cost of power and petroleum. Gasoline is mostly utilized for personal transportation, compact cars, rickshaws, and two-wheelers, and its cost directly impacts the middle-class and lower-class budgets. However, because HSD is largely used in heavy-duty vehicles, trains, and agricultural engines such as trucks, buses, tractors, tube wells, and threshers, its price is thought to be very inflationary. In particular, it raises the cost of vegetables and other food items.
The governmental tax on gasoline and HSD is approximately Rs 82 per litre. The government charges Rs60 per litre PDL for both petroleum products, even though the general sales tax (GST) is nil on them.
However, it charges Rs. 50 per litre for 95RON gasoline, a high-octane mixing component. Additionally, the government levies a customs fee of roughly Rs. 19–20 per litre on gasoline and HSD.
The main sources of income are gasoline and HSD, which sell between 700,000 and 800,000 tonnes per month whereas kerosene demand is only 10,000 tonnes.
