Current government took the petroleum prices to new heights in last few months in order to meet the IMF conditions. Massive increase in oil prices have remained a topic of discussion at micro as well as macro level, it is likely that the prices of petroleum products are going to be reduced because of significant drop in prices in international market.
I have ordered Ministries of Petroleum & Finance to pass on the reduction in the prices of POL products in the international market to people. They have faced economic difficulties & the relief is their right. With Allah's grace, we will continue to bring ease in their lives, IA.
— Shehbaz Sharif (@CMShehbaz) July 12, 2022
On Tuesday, the prime minister asked for a summary from the Oil and Gas Regulatory Authority (Ogra) in order to take a decision to reduce prices of petroleum goods and provide assistance to the public, as the government had substantially increased the prices.
Read more: Be ready for another increase in fuel prices!
He also directed that the ministries of finance and petroleum to submit a summary for his approval, stating that the people needed relief after going through tough times.
He informed the meeting that the government would drop oil prices transparently in line with the decrease in the international market, which the PM Office described as a present to the people after Eid-ul-Azha.
He stated that the government would strive to provide assistance to those affected by the inflation caused by previous government.
The meeting was attended by senior officials from the Ogra, ministries, and other departments, and the prime minister decided to pass on the entire benefits of the drop in global oil prices to the people.
According to Bloomberg, oil declined as a renewed increase in China’s virus cases fed into weakness across global markets and the US awarded more crude from its reserves.
In past, the government was continuously increasing the prices of petroleum products since May 26, 2022, by eliminating subsidies and imposition of petroleum levy.
The prices of petroleum products effective from July 01, 2022, were:
The new prices of petrol have been increased by Rs14.85 per liter to Rs248.74 from Rs233.89.
The rate of high-speed diesel has been increased by Rs13.25 per liter to Rs276.54 from Rs263.31.
The rate of kerosene oil has been increased by Rs18.83 per liter to Rs230.26 from Rs211.43.
Similarly, the rate of light speed diesel has been increased by Rs18.68 per liter to Rs226.15 from Rs207.47.
Recently, National Assembly (NA) approved a levy of Rs50 per liter on each petroleum product. The assembly allowed the government to include the levy in the prices of petroleum products up to Rs50 per liter of each product.
Even though the prime minister urged the authorities to reduce the prices of petroleum goods in response to the drop in oil prices in international markets, the imposition of a petroleum levy may limit the government’s ability to reduce prices significantly.