Petrol, diesel prices expected to drop in Pakistan from May 1

ISLAMABAD: Good news for the inflation-hit masses is that the prices of all petroleum products are likely to decrease by up to Rs 8.03 per litre for fifteen days with the start of next month of May, 2024.

This price slash is expected due to the downward trend in rates of petrol and diesel in the international market. 

The price of petrol decreased by $1.86 per barrel to $107.16 per barrel, while the price of diesel in the global market recorded a fall of $4.30 per barrel to $104.76 per barrel.

According to sources, the petrol is expected to see a cut of Rs 4.88/litre, high speed diesel (HSD) could witness a decrease by Rs 7.37per per litre, while the price of Light Diesel Oil (LDO) may be reduced by Rs 5.37/litre and kerosene oil may witness a decrease of Rs 8.03 per litre.

They said these estimates are based on the current tax structure and, if approved, would mean that consumers could be paying Rs 289.06 per litre for petrol, Rs 283.01per litre for HSD, Rs 185.05 per litre for kerosene oil, and Rs 168.97 per litre for LDO, all starting with the start of May 2024, said sources.

These proposed changes in petrol, diesel, and kerosene oil prices are calculated based on current government taxes, they added.

It is also learnt from the sources that likely reduction in oil prices for the first half of May 2024 are calculated without exchange adjustment, while current Inland Freight Equalization Margin (IFEM) on petrol/PMG is Rs 6.75 and HSD Rs 3.71.

At present, petrol is available at Rs 293.94/litre, HSD at Rs 290.38/litre, Kerosene oil at Rs 193.08/litre and LDO at Rs 174.34/litre.

Oil prices in international market were little changed on Thursday as falling fuel demand in the US, the world’s biggest oil user, amid signs of a slowing economy contended with concerns for a widening conflict in the key Middle East producing region.

Brent crude futures edged up 9 cents to $88.11 a barrel at 0420 GMT, after falling 0.5% in the previous session.

US West Texas Intermediate crude futures for June gained 7 cents to $82.88 a barrel, following a 0.6% drop on Wednesday.

Data from the U.S. Energy Information Administration (EIA) showed gasoline demand in the week to April 19 dropped 2.8% from a week earlier and is down 11% from a year ago. Distillate fuel demand also declined from a week ago and is down 4.7% from a year ago.

As per sources, these proposed changes are subject to government approval and will depend on various factors, including global oil prices, currency exchange rates, and the financial implications for the energy sector.

It is relevant to note that Petrol is primarily used as fuel for cars, motorcycles, and other vehicles.

High-Speed Diesel (HSD) is mainly used as fuel for heavy vehicles like trucks, buses, and industrial machinery. It is also used in generators and some agricultural equipment.

Kerosene Oil is used for cooking and lighting in households without access to electricity.

Light Diesel Oil is used in industrial boilers, furnaces, and certain types of engines. It’s commonly utilised in sectors like textiles, cement, and power generation.