New Petrol Levy on Petrol, Diesel in Pakistan amid big cut in prices

ISLAMABAD – Pakistani government provided relief to petrol consumers by reducing petroleum levy by Rs40.49 per litre, enabling considerable cut in fuel prices amid declining global crude oil prices, although authorities simultaneously increased the levy on high-speed diesel to meet fiscal requirements. Authorities lowered petroleum levy on petrol by Rs40.49 per litre while increasing levy on high-speed diesel (HSD) by Rs19.71 per litre as part of the latest fuel price adjustment announced on June 20. According to official figures, the petroleum levy on petrol has been brought down from Rs106.74 per litre to Rs66.25 per litre. The reduction comes amid a decline in international crude oil prices and has contributed to a decrease of around Rs34 per litre in petrol prices for consumers. The levy on high-speed diesel has been increased from Rs53.26 per litre to Rs72.97 per litre, reflecting a rise of Rs19.71 per litre. Officials said the revisions were made after taking into account trends in the international oil market as well as the government’s fiscal considerations. They noted that while falling global crude oil prices created room for a larger reduction in domestic fuel prices, the government opted to adjust petroleum levies while providing partial relief to consumers. The price cut is said to benefit petrol consumers, particularly private vehicle owners, through lower fuel costs. However, the increase in the diesel levy may have implications for sectors that rely heavily on HSD, including transportation, agriculture, and industry. Petroleum product prices in oil-dependent Pakistan are determined by international oil prices, import premiums, exchange rate movements, taxes, and petroleum levies. As a result, fluctuations in global crude oil prices do not always result in equivalent changes in domestic fuel rates. Why doesn’t every drop in Global Oil Prices reach Pakistani Petrol Pumps? Explained