Govt likely to reduce petrol price by Rs3.40 per litre

ISLAMABAD: Owing to the appreciating rupee against the US dollar, the government is likely to reduce the petrol and diesel prices for the second half of this month. The Oil and Gas Regulatory Authority (OGRA) working has revealed that there is room for Rs3.40 per litre cut in petrol and Rs2.5 per litre in diesel prices, sources said.

Earlier, for the first fortnight of November, the government had slashed the petrol price by Rs1.57 per litre and diesel by Re0.84 per litre, while kerosene and Light Diesel Oil (LDO) prices were kept unchanged.

Petrol is being sold now at Rs102.40 per litre, diesel Rs103.22 per litre, Kerosene Rs65.29 per litre and LDO at Rs62.86 per litre. The regulator will send the summary to the Finance Division. The government would make a decision on November 15 to make it effective from the next day.

In the months to come, the consumption of diesel and petrol can increase. In winter, due to gas shortages, CNG filling stations could face gas supply problems. So car owners will shift to petrol. Since the Rabi season has started, so diesel’s demand will also increase as crops, including wheat, are being sown. According to the latest analysis by the JS Global Capital, the sale of petroleum products has touched a two-year high of 1.7 million tons in October. It increased by 11 percent over the previous month.

Revival of economic and business activities can be attributed to this spike. Diesel sale in October increased by 43 percent to 0.67 million tons against 0.47 million tons in September. In the same month of the last year, its sale stood at 0.65 million tons. Petrol sale jacked up by seven percent to 0.69 million tons in October compared to 0.64 million tons in September.

Meanwhile, the rupee is gaining strength against the US dollar for the last several months due to foreign inflows. Only on Friday, it gained 17 paisas in interbank against the dollar. A State Bank of Pakistan tweet said the US dollar on Friday opened at Rs158.33 and closed at Rs158.16. This level was last seen eight months ago in mid-March. During this week, the rupee gained Rs0.93 against the greenback.