Govt Likely to Reduce Petrol Price Further

The prices of high-speed diesel (HSD), kerosene oil, and light diesel fuel are likely to rise by Rs. 5 to Rs. 12 per liter on October 15, while petrol’s price will likely fall.

According to Dawn, this is only possible if the government sticks with the current tax rates. Based on these rates, the ex-depot price of petrol will likely fall by Rs. 10.75 per liter to around Rs. 214.

In contrast, the price of HSD will rise by Rs. 11.50 a liter to around Rs. 247. Similarly, kerosene and light diesel oil (LDO) prices will also climb by Rs. 4.50 and Rs. 7.50 per liter to around Rs. 196 and Rs. 194 per liter, respectively.

The report notes that the benchmark international crude prices had fallen in recent weeks. However, due to refining capacity constraints, margins and premiums on HSD had risen, resulting in a higher cost impact on HSD imports.

Also, crude oil prices have started rising again this week as a result of production cuts from major oil-exporting countries. These cuts will translate into price increases in the following two weeks, starting next month.

Based on Finance Minister Ishaq Dar’s confidence level in Washington, the government may maintain petrol and HSD rates through a proportionate adjustment in the petroleum development levy (PDL). Thereafter, the PDL on fuel would approach the maximum level agreed upon with the IMF.

It is a promising prospect for daily commuters as well as other industries dependent on fuel prices. Although this news is to be taken with a pinch of salt as the interim government has a history of not seeing its enthusiastic claims come to fruition.