Govt Planning to Announce Good News for Petrol Users

The global diesel market’s significant price drop may prompt the federal government to provide significant relief to citizens in the first two weeks of April.

Reports indicate that the federal government plans to announce a substantial reduction of up to Rs. 14 per liter in ex-depot fuel prices on the basis of the prevailing petroleum levy and general sales tax, which will take effect on 1 April.

In the present high inflationary climate, the price of high-speed diesel (HSD) is anticipated to decrease by Rs. 14.31 per liter, a much-needed respite for the general public.

Diesel plays a crucial role in the transportation and agricultural industries. The reduction in its price would be particularly beneficial to farmers as the crop sowing season has begun.

If the government opts for complete price relief for consumers, the cost of diesel will decrease to Rs. 278.66 per liter from the current rate of Rs. 293 per liter.

Meanwhile, oil marketing firms are predicting a reduction of Rs. 3.51 per liter in petrol prices.

As CNG outlets in Punjab depend on imported gas, petrol is a viable alternative, especially during winter when LNG is not available.

The government is currently developing a Rs. 120 billion cross-subsidy program for petrol consumption. It plans to impose a Rs. 50-per-litre higher price on luxury car owners and provide an equal amount of price relief to motorbike and small car owners.

The government has a chance to lower the price of petrol and offer relief to low-income and lower-middle-class consumers.

If the entire reduction is passed on to consumers, the cost of petrol will decrease to Rs. 268.49 per liter, down from the current rate of Rs. 272 per liter.

Similarly, the price of kerosene oil could decline by Rs. 13.46 per liter, and light diesel oil (LDO) by Rs. 10.28 per liter. Kerosene oil is a crucial household fuel for cooking and heating in remote areas, and the reduction could bring the price down from Rs. 190.29 per liter to Rs. 176.83 per liter. LDO may also see a decline to Rs. 174.40 per liter from Rs. 184.68 per liter.

The price calculation is based on Pakistan State Oil’s (PSO) supply costs. The government may permit a Rs. 6 per litre exchange rate adjustment on petrol and Rs. 15 per liter on HSD. In the last 13 days, the US dollar has appreciated by Rs. 4.66 against the Pakistani rupee.

To meet an International Monetary Fund (IMF) requirement, the government must raise the petroleum levy on HSD by Rs. 5 to Rs. 50 per liter effective from April 1. The government has already been charging a petroleum levy of Rs. 50 per liter on petrol since November 2022.

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