Friday, May 24, 2024

Major Drop in Petrol Prices Expected from Tomorrow in Pakistan

Pakistanis struggling with high inflation may soon find some relief as a significant decrease in petroleum product prices is expected to take effect from tomorrow during the fortnightly review. The government had previously lowered petrol prices by Rs5.45 and diesel prices by Rs8.42 per litre, and now further reductions are anticipated. This drop in prices is attributed to the declining oil prices in the international market and a consistent decrease in inflation as indicated by the consumer price index (CPI) over the past four months.

The anticipated decrease in global petrol prices by $7.26 per barrel is expected to translate to a reduction of Rs12.84 per litre in the domestic market. Similarly, diesel prices are forecasted to decrease by Rs8.30 per litre following a decline of $4.68 per barrel. Presently, global petrol and diesel prices stand at $98.99 and $99.37 per barrel, respectively.

This decrease in fuel prices comes at a favorable time, with the CPI dropping to 17.6 per cent in April, the lowest since May 2022. This development is seen as positive for the coalition government led by Prime Minister Shehbaz Sharif.

Historically, declining oil prices globally have benefited previous governments, including the PML-N. However, the extent of benefit this time may not be as significant due to a weaker rupee compared to previous years.

The reduction in fuel prices, coupled with the decreasing annual inflation, is likely to benefit the PML-N during negotiations with the IMF for a bailout program. Moreover, the Punjab government under PML-N Chief Minister Maryam Nawaz has implemented effective price control measures, resulting in lower food prices, including wheat flour, and reduced prices for roti in the province.

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