ISLAMABAD: Federal government may announce a substantial reduction in ex-depot fuel prices up to Rs14 per litre based on the current petroleum levy (PL) and general sales tax (GST), with effect from April 1, 2023.

Oil marketing companies (OMCs) estimate that Rs3.50 per litre reduction is expected in petrol price. It is likely that the price of high-speed diesel (HSD) to come down by Rs14 per litre. Similarly, the price of kerosene oil (KERO) may climb down by Rs13 per litre and light diesel oil (LDO) price by Rs10 per litre.

According to the OMCs estimate, the petrol price would be reduced from Rs272 to Rs268. The price of HSD would reduce to Rs278 from Rs293 per litre. Likewise, the prices of KERO would come down from Rs190.26 to Rs176 per litre and LDO from Rs184.68 to Rs 174 per litre.

First half of March: Fuel prices may be kept unchanged by adjusting PL

The calculation is based on the cost of supply of Pakistan State Oil (PSO). The federal government may allow Rs6 per litre exchange rate adjustment on petrol and Rs15 on HSD. In the last 13 days, the US dollar against the Pak rupee gained Rs4.66.

The government has to increase PL on HSD by Rs5 per litre to Rs50 per litre with effect from April 1 to meet one of the conditions of the IMF. The government has been charging Rs50 per litre PL on petrol since November 2022.

With effect from March 16, 2023, the federal government allowed Pakistan State Oil (PSO) an exchange rate adjustment of Rs24.67 per litre on high-speed diesel and Rs6.30 per litre on petrol.

Average of Platts with incidentals and duty on HSD has fixed for March 16, 2023, at Rs219.34 per litre from Rs202.99 per litre and Rs201.65 per litre on petrol from Rs187.21 per litre.

The petroleum levy (PL) rate on HSD is Rs45 per litre and Rs50 per litre on petrol for the second half of March 2023.

Copyright Business Recorder, 2023