Pakistan Poised for Petrol and Diesel Price Cuts Amid Global Oil Decline

Pakistan's government is set to cut fuel prices starting May 16, with petrol prices expected to fall by Rs13.40 per liter and diesel prices by Rs8.19 per liter. The price reduction is due to the global drop in oil prices, with crude oil trading at $82.5 per barrel.

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Nitish Verma
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Pakistan Poised for Petrol and Diesel Price Cuts Amid Global Oil Decline

Pakistan Poised for Petrol and Diesel Price Cuts Amid Global Oil Decline

In a welcome relief, petrol, price, expected, may, the Pakistani government is set to cut fuel prices starting May 16, 2024. According to sources, petrol prices are expected to fall by Rs13.40 per liter, while diesel prices are estimated to decrease by Rs8.19 per liter.

petrol, prices, likely, per, liter, may This price reduction is a result of the global drop in oil prices, with crude oil trading at $82.5 per barrel. The relief is based on preliminary calculations of the petroleum product trade over the past ten days on the global market, and the estimates will solidify further over the next two days before being implemented with the prime minister's consent.

Why this matters: This development has significant implications for the Pakistani economy, as lower fuel prices can help curb inflation and boost economic growth. Furthermore, the move could also have a positive impact on the country's trade balance and overall economic stability.

This would be the second consecutive respite in the current month, following a previous price cut on May 1, 2024, when the government reduced the price of motor spirit (MS) by Rs 5.45 per liter to Rs 288.49 per liter, and diesel prices decreased by Rs 8.42 per liter to Rs 281.96 per liter.

drop, expected, petrol, prices If approved, the price of petrol and diesel would drop to approximately Rs 274 and Rs 271, respectively. The anticipated price reduction is expected to boost petroleum product consumption starting May 16, as well as curb the smuggling of petroleum products from Iran.

The decline in international oil prices is attributed to the return of stability in the Middle East, following the Iran-Israel missile attacks and reduction in Red Sea tension. Additionally, oil prices extended declines on Monday due to signs of weak fuel demand and comments from US Federal Reserve officials that dampened hopes of interest rate cuts.

petrol, may, see Brent crude futures slid 26 cents, or 0.3%, to $82.53 a barrel by 0025 GMT, while US West Texas Intermediate crude futures was at $78.03 a barrel, down 23 cents, or 0.3%. Oil prices also fell amid signs of weak demand, with US gasoline and distillate inventories rising ahead of the start of the US driving season.

The market remains supported by expectations that the Organization of the Petroleum Exporting Countries (OPEC) and their allies, known as OPEC+, could extend supply cuts into the second half of the year. Iraq, the second-largest OPEC producer, is committed to voluntary oil production cuts agreed by OPEC and is keen to cooperate with member countries on efforts to achieve more stability in global oil markets.

The government of Pakistan has taken proactive measures to alleviate the burden on the public, aiming to provide economic relief and stability to citizens. The anticipated fuel price cuts, driven by the global decline in oil prices, mark a significant step towards achieving this goal. As the nation awaits the final decision, all eyes are on the government to deliver on its promise of much-needed respite for the people of Pakistan.

Key Takeaways

  • Pakistan to cut fuel prices from May 16, 2024, due to global oil price drop.
  • Petrol prices expected to fall by Rs13.40 per liter, diesel by Rs8.19 per liter.
  • Lower fuel prices to curb inflation, boost economic growth, and improve trade balance.
  • Global oil prices drop due to Middle East stability, weak fuel demand, and interest rate comments.
  • Anticipated price reduction to boost petroleum product consumption and curb smuggling.