Fuel prices set to drop at least by 4.5% amid global oil rout

KARACHI: The domestic fuel prices are expected to fall by around Rs13 per litre for both petrol and diesel in the next fortnightly review, industry officials said on Thursday, citing a substantial drop in global oil prices over the past two weeks.

The officials said the working of the oil sector for the next review, scheduled for December 15, showed a downward trend in prices for all petroleum products. The government reviews the prices of petroleum products every fortnight and adjusts them according to the international market trends and the exchange rate of the rupee.

The price of petrol may come down by Rs13.10 per litre to Rs.268.24 per litre in the next review, compared to the existing price of Rs281.34 per litre. The price of HSD is likely to drop by Rs13.66 per litre to Rs276.05 per litre, compared to the current price of Rs.289.71 per litre.

The price of kerosene may witness a decrease of Rs8.36 per litre in the next review, to Rs192.80 per litre from the existing price of Rs201.16 per litre, and the price of light diesel oil (LDO) may decrease by Rs10.23 per litre to Rs165.70 per litre from the current price of Rs175.93 per litre.

Industry officials said that the ex-refinery prices of the petroleum products had been showing the downward trend because of the fall in the global oil prices, which had sharply come down during the last two weeks.

However, they said that the government would announce the final price after adjusting the exchange rate.

“It remains to be seen whether the government passes on the full impact of the falling prices in the global market to domestic consumers, as in the previous review of prices, the government didn’t pass on the full benefit of the decline in the prices of petroleum products to local consumers,” an industry official said.

The interim government kept petrol prices unchanged for the first half of December, despite a Rs10.70 per litre reduction in the average Platts (a price benchmark service for the oil industry) over the exchange rate adjustment, when PSO was allowed a downward rupee exchange rate adjustment of Rs 3.21 per litre with effect from December 1-15, 2023.