ISLAMABAD: In case the interim government disallows exchange rate adjustment to Pakistan State Oil (PSO), there are estimates that the ex-depot prices of petrol and high-speed diesel (HSD) may witness a significant decline with effect from December 16.

According to an estimate of Oil Marketing Companies (OMCs), based at the current rate of petroleum levy (PL) and general sales tax (GST), Rs13 per litre reduction in both petrol and HSD are projected for the second half of December 2023.

Petrol price likely to remain unchanged

This anticipated reduction is attributed to a decline in global oil prices and the strengthening of the rupee against the US dollar. Since December 1, 2023, the per barrel price of crude oil has fallen by $5.49 to $94.95, while the price of HSD has decreased by $5.13 to $100.05 globally.

However, Pakistan imported 70 percent refined products as five refineries have limited capacity. In case the interim government agrees with the estimation of OMCs, the price of petrol will go down from Rs281.34 to Rs268, and HSD from Rs289.71 to Rs276 per litre.

The price of kerosene oil (Kero) will go down by Rs8 per litre from Rs201 to Rs192 and light diesel oil (LDO) from Rs175.93 to Rs165 per litre.

A final decision on the revised fuel prices in the light of recommendation by the Oil and Gas Regulatory Authority (OGRA) is expected from the government on December 15. The decline in prices of petroleum products will provide the biggest boost to the country’s Sensitive Price Index (SPI), which continued to rise by 1.16 percent for the week ended December 7, 2023.

Copyright Business Recorder, 2023