Pakistan's fuel prices may fall by over Rs55 per litre from June 20

ISLAMABAD: Petroleum consumers may get relief of more than Rs55 per litre from June 20, as the government is likely to consider a major cut in fuel prices following a sharp decline in global crude oil rates after a possible US-Iran agreement.

According to industry sources, the Petroleum Division, the Oil and Gas Regulatory Authority (OGRA) and Pakistan State Oil (PSO) have finalised working papers on the proposed reduction in petroleum prices at the direction of Prime Minister Shehbaz Sharif.

Sources said the prime minister had directed the Petroleum Minister and relevant authorities to ensure maximum relief for consumers by passing on the full benefit of lower global oil prices.

The government is reviewing various proposals to offset the impact of the price increase announced on March 7.

According to sources, Prime Minister Shehbaz Sharif was not satisfied with the March 7 increase in petroleum prices and now wants consumers to directly benefit from the reduction in international oil prices.

On March 7, the government increased petrol prices by Rs55 per litre to Rs321 per litre, while the price of high-speed diesel was raised by Rs55 per litre to Rs335.17 per litre.

The expected reduction follows a significant fall in international crude oil prices. Arab Light crude oil, considered Pakistan’s benchmark grade, has declined by $16 per barrel within a week, falling from $96 per barrel on June 11 to $80 per barrel on June 18.

Historical market data shows that Arab Light crude was priced at $70 per barrel on February 27 before rising to $89 per barrel by March 6. During heightened tensions involving the United States and Iran, the price surged further and reached a peak of $140 per barrel on March 23.

Meanwhile, reports of a substantial cut in petroleum prices have raised concerns among oil marketing companies. Some companies are opposing a reduction of more than Rs55 per litre in a single adjustment and are reportedly lobbying for a phased decrease.

Sources said oil marketing companies were seeking a gradual reduction in prices to minimise financial losses on existing inventories purchased at higher rates.

The Petroleum Division is expected to issue a notification on the revised petroleum prices tomorrow night after obtaining final approval from the prime minister.