Fuel Prices Set to Plummet: Rates Expected to Drop by Up to Rs15

ISLAMABAD—Fuel prices in Pakistan are expected to decrease significantly on May 15, with petrol and high-speed diesel (HSD) rates anticipated to drop by approximately Rs15 and Rs9 per litre, respectively. This reduction is attributed to a notable decline in the international market, where petrol and HSD prices have decreased by about $8.7 and $4.3 per barrel, respectively, over the last fortnight.

According to sources, despite an increase in import premiums, the reduction in international prices is expected to result in a substantial decrease in local prices. The import premium on petrol increased by more than 7% in the last fortnight to $10.30 per barrel, while the rupee also gained about 20 paise against the dollar during the same period.

The government has already reached the maximum petroleum levy permissible by law and has collected Rs720 billion in the first nine months of the fiscal year. Under the International Monetary Fund (IMF) commitments, the government had set a budget target to collect Rs869 billion as petroleum levy during the current fiscal year.

The decrease in fuel prices is expected to provide relief to consumers and help curb inflation, particularly benefiting the middle- and lower-middle-class households that rely on petrol and HSD for their transportation needs. This development comes after a previous reduction in petrol and HSD prices on May 1, when the prices dropped by Rs5.63 and Rs8.42 per litre, respectively.

Fuel prices, which are major revenue spinners, with their monthly sales of about 700,000–800,000 tonnes compared to just 10,000 tonnes of monthly demand for kerosene, have been a key factor contributing to inflation in Pakistan. Petrol is mostly used in private transport, small vehicles, rickshaws, and two-wheelers, while HSD is primarily used in heavy transport vehicles, trains, and agricultural engines.