Petroleum prices in Pakistan will likely decrease this week or see no change at all after huge fluctuations in international oil markets in the outgoing fortnight.
The expected reduction could be a big one or absolutely nothing on May 1, 2025, .The real problem is that recent government policy changes could prevent the public from fully benefiting.
Globally, Brent crude has declined to $66.60 per barrel, while US West Texas Intermediate (WTI) crude is priced at $62.85 per barrel. This week alone, crude prices are projected to fall by roughly 3 percent.
Historically, falling global oil prices have led to domestic price cuts in Pakistan. But the government now has unrestrained access to controlling the petroleum levy after increasing it in the past two fortnights for all grades of petroleum products. Under the new framework, the government can now adjust the petroleum levy without any upper limit.
This change raises concerns that even if international prices continue to fall, the government may choose to hike the levy and keep fuel prices unchanged.
On April 15, the government kept domestic petroleum prices unchanged for 15 days but raised the petroleum levy instead of passing on relief to consumers. Petrol currently sells at Rs. 254.63 per litre, while high-speed diesel (HSD) stands at Rs. 258.64 per litre.
Unless the government refrains from increasing the levy again, the public may see only minimal or no benefit from the ongoing global oil price slump.