Govt Considers Rs55+ Per Litre Fuel Price Cut

ISLAMABAD: Petroleum consumers could receive significant relief from June 20 as the federal government is considering a reduction of more than Rs55 per litre in fuel prices amid a sharp decline in international crude oil markets.

According to industry sources, working papers outlining the proposed price adjustment have been completed by the Petroleum Division, the Oil and Gas Regulatory Authority (OGRA), and Pakistan State Oil (PSO) following directives issued by Prime Minister Shehbaz Sharif.

Sources stated that the prime minister has instructed the Petroleum Minister and relevant authorities to ensure that the full impact of lower global oil prices is transferred to consumers through reduced domestic petroleum rates.

The government is currently evaluating multiple proposals aimed at reversing the burden created by the fuel price hike announced on March 7.

Officials familiar with the matter said Prime Minister Shehbaz Sharif was dissatisfied with the earlier increase and has emphasized that the recent decline in international oil prices should translate into immediate relief for the public.

On March 7, petrol prices were increased by Rs55 per litre to Rs321 per litre, while high-speed diesel prices were raised by the same amount, reaching Rs335.17 per litre.

The anticipated reduction is linked to a steep fall in global crude oil prices. Arab Light crude, which serves as a key benchmark for Pakistan's petroleum imports, has dropped by approximately $16 per barrel within a week, declining from $96 per barrel on June 11 to nearly $80 per barrel on June 18.

Market data indicates that Arab Light crude was trading around $70 per barrel on February 27 before climbing to $89 per barrel by March 6. Prices later surged amid escalating tensions involving the United States and Iran, eventually touching a high of $140 per barrel on March 23.

Meanwhile, reports of a substantial reduction in petroleum prices have triggered concerns among oil marketing companies. Several firms are reportedly opposing an immediate cut exceeding Rs55 per litre and are advocating for a phased adjustment strategy.

Industry sources said these companies fear significant inventory losses, as existing fuel stocks were purchased at considerably higher prices and would lose value if rates are reduced sharply in a single revision.

The Petroleum Division is expected to issue an official notification regarding revised petroleum prices tomorrow night after receiving final approval from the prime minister.