The government may be compelled to provide a significant relief to petroleum consumers for the first two weeks of April if the price of diesel falls significantly on the global market.
Based on the current petroleum levy and general sales tax, sources say that the federal government may announce a significant reduction in ex-depot fuel prices of up to Rs14 per liter, which would take effect on April 1, 2023.
In the current high inflationary environment, the price of high-speed diesel (HSD) is likely to decrease by Rs14.31 per liter, which is a welcome relief for consumers.
The agricultural and transportation industries rely heavily on diesel. As the crop sowing season has begun, any decrease in its price will be especially encouraging to farmers.
Diesel will cost Rs278.66 per liter, compared to the current price of Rs293 per liter, if the government provides consumers with full price relief.
In the meantime, oil marketing firms anticipate a reduction in the price of gasoline of Rs3.51 per liter.
Petroleum products can be used in place of compressed natural gas (CNG), particularly in Punjab, where CNG outlets import gas. However, LNG was not made available to them during the most recent winter.
Currently, the government is working on a Rs120 billion cross-subsidy program for gasoline consumption. It intends to charge luxury car owners a higher price of Rs50 per liter while offering price relief equivalent to that for small cars and motorcycles.
The government has a chance to lower the price of gasoline now in order to help consumers in the lower middle class and the poor.
The current price of Rs272 per liter of gasoline will be reduced to Rs268.49 per liter if the entire relief is passed on to consumers.
In a similar vein, the cost of kerosene oil may decrease by Rs13.46 per liter and the cost of light diesel oil (LDO) may decrease by Rs10.28 per liter.
Because it is used for heating and cooking in remote areas, kerosene oil is an important household fuel. It might cost Rs176.83 per liter instead of Rs190.29 per liter. The price of LDO may drop from Rs184.68 per liter to Rs174.40 per liter.
The Pakistan State Oil (PSO)-borne cost of supply serves as the basis for the price calculation. An adjustment of Rs6 per liter for petrol and Rs15 per liter for HSD may be permitted by the government. The Pakistani rupee has appreciated by Rs4.66 against the US dollar over the past 13 days.
In order to fulfill an IMF requirement, the government must raise the petroleum levy on HSD by Rs5 to Rs50 per liter beginning on April 1.
Since November 2022, it has been levying a petroleum levy of Rs50 per liter on gasoline.