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)
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@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)
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.
@Parvez and All other The exchange rate plays an important role here which are direct results of Government's monetary policies. The more Rupee will appreciate the more savings from lowered cost of Oil will be transferred. Weather you want to give credit to Govt or not, it DOES NOT matter, Govt will get credit automatically to its voting areas when the results will be sustained over a period of time. That is why in 2018 after full tenure people can judge if the policies had any results and where economy is going. I personally think that PMLN has right set of priorities in stimulating economy by massive projects and by 2017 results will start coming out.
Governments of tax evading nations generate revenue same way. Why don't you pay your taxes when you expect govt to slash prices and loose their revenues.
@Sami: We are not ready to give any kind of credit to poor Govt.
World price of oil is expected to fall to UD 70 / barrel .....lets hope some of this gets passed down to the people.
@Asad: @Usman Aziz: @asim: Have any of you looked at the rupee dollar exchange rate recently? The rupee is depreciating so of course imports are going to be more expensive. That is why the price reduction is not as high as it could be.
Now I hope govt will pressurize traders to revise down commodity prices those they have raised by making excuse of increase in fuel price.
"relief-for-consumers-a-hefty-cut-in-fuel-prices-in-the-offing" This will not be the benevolence of PML-N's government on the nation because this will happen,if suppose this happens,only because in international market oil prices are reducing and government has collected enough profit during the that days when oil prices were reduced in international market and government didn't reduce.....
Proud to have voted for N League. PTI and its supporters can only cry as they don't want to work their way to happiness/wealth. They want a socialist country in which they remain inactive and government of the day increases their wealth, which can never happen. Only hollow slogans of IK and his group.
Oil prices have fallen 35% in international markets but no relief given to public; The government buys oil at a very cheap rate and adds 100% taxes where is that money going? The oil price should be less than 50 RS per liter even then the government will be making profit
Only Sane People Know that it is very little relaxation in oil Prices when compare with 25% decrease in international prices.Even then Thanks to IK for this bcz it happens only due to his pressure on Corrupt rigged Govt
Dont praise the government when the prices go down, but criticize it when the price goes up due to global rise in price. Nice strategy guys.
PMLN will take credit for the increase in US oil production.
@asad @sami
Keep crying. Days what you learnt from IK
Government should cut CNG prices also!
Thanks IK
Considering the percentage decrease in the fuel prices internationally, its nothing!
There is no point here to praise government, it still sucks a lot.