Relief for consumers: A hefty cut in fuel prices in the offing

Up to Rs8 per litre decrease likely to be effective next month.


Zafar Bhutta October 26, 2014

ISLAMABAD: Pakistani consumers should expect a hefty cut in fuel prices as global oil prices continue to plummet following a boom in US shale oil production.

A decrease of up to Rs8 per litre is likely to come into effect next month, The Express Tribune has learnt. This will allow consumers to enjoy lower fuel prices for the third consecutive month. In October, the government had slashed the prices by 2.8% after oil prices dipped in the international market.

With the global oil markets buoyed by a glut of crude oil coming out of the US shale reservoirs, the downward trend seen in the value of crude oil is likely to continue.

“In the short term, the decline in oil prices would continue as OPEC would meet after a month to decide whether or not to slash production to avoid further decline in oil prices,” a senior government official said commenting on the trend. He added that OPEC had been cutting oil production to maintain the prices, which have been hovering around the $85 per barrel mark.

The official said the average crude oil price in Pakistan would stand at $85 per barrel and its impact would be passed on to consumers.

Following the expected cuts next month, the price of High Speed Diesel (HSD), which is widely used in heavy transport vehicles and the agriculture sector, is likely to come down by Rs5.50 per litre. Currently, it is sold at Rs107.39 per litre.

Similarly, the petrol price could witness a cut of Rs5.25 per litre against its current price of Rs103.62 per litre. Kerosene oil, which is used as kitchen fuel in remote areas of the country, may record a decrease of Rs5.50 per litre.

Consumers of High Octane Blending Component (HOBC), used mainly in luxury vehicles, are likely to enjoy a reduction of Rs8 per litre against the current price of Rs131.13 per litre.

Likewise, the price of light diesel oil, consumed mainly by industrial units, may also be reduced by Rs5 per litre. Currently, it is available at Rs91.41 per litre. “This trend may change and the final calculation would be made on October 30,” the official further said.

Published in The Express Tribune, October 27th, 2014.

COMMENTS (20)

Kah | 8 years ago | Reply

@Majid: @Ahmed:

Are you implying that it was NS, who somehow effected global price drop in oil prices by about 30 to 35 %.

While he is that influential, can you please also ask him to lower inflation (just in Pakistan not necessarily globally), so we can see a proportional drop in prices in Pakistan, and not just about 5 %.

Once he has done that, then we will ask for 24 hr electricity, water and gas too. (again just in Pakistan not globally)

Yasir Javed Sheikh | 8 years ago | Reply

The prices have gone down from $108 per barrel to $80 per barrel. Now smart people will realize how much government need to cut to maintain international-local oil parity. If we take the parity then it should come down at least Rs. 20 per liter but this will never happen. So government is virtually doing crime with general public.

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