Slight relief in POL prices likely from Sept 1

ISLAMABAD: Amid catastrophic flooding triggered by cloudbursts, landslides, and flash deluges across Punjab—with spillover impacts expected in Sindh—the country is likely to witness a slight reduction in petroleum product (POL) prices from September 1, offering modest relief to consumers.

According to official estimates, petrol prices may be reduced by Re0.61 per litre, while high-speed diesel (HSD) could see a more significant drop of Rs3.13 per litre. Similarly, kerosene oil is expected to decline by Rs1.57, and light diesel oil (LDO) by Rs2.61 per litre. These downward revisions follow a marginal dip in international oil prices. Brent crude stood at $67.30 per barrel on August 16, peaked at $68.18 on August 18, and then declined to $66.73 by August 27. Though modest, the easing trend in global oil markets has influenced the local pricing structure.

Accordingly, the new sale price of petrol may set at Rs264.00/litre (down from Rs264.61), HSD at Rs269.86/litre (down from Rs272.99), kerosene oil at Rs176.70/litre and LDO at Rs159.55/litre

The price cuts come against the backdrop of projections by leading global institutions. Goldman Sachs forecasts Brent to average between $60–66 per barrel through the remainder of 2025, potentially falling into the low $50s in 2026 if supply surpluses materialise.

Meanwhile, the US Energy Information Administration (EIA) expects Brent prices to dip below $60 per barrel in Q4 2025, with levels hovering around $50 throughout 2026 due to rising global inventories and output.

The current price of petroleum products includes a significant petroleum levy, carbon levy, freight burden, customs duty and deemed duty.

Consumers currently pay petroleum levy and carbon levy of Rs80.52 per litre on petrol, Rs79.51 on HSD and Inland Freight Equalisation Margin (IFEM) of Rs8.05 on petrol, and Rs6.20 on HSD. The premiums on petrol looks at $6.37 per barrel, and $3.20 per barrel on HSD.

Despite the disaster-struck landscape, the marginal reduction in POL prices may provide limited financial respite to households and industries already grappling with high inflation and disrupted supply chains.