Fuel prices are expected to drop significantly in May

Fuel prices are expected to drop significantly in May

Ex-depot petrol rates may drop by Rs13.40 per litre, and high-speed diesel (HSD) by Rs8.19 per liter for the next two weeks from May 16, according to estimates.

Petrol premium is expected to be around $10.30 per barrel, and $6.50 per barrel on HSD, while the exchange rate adjustment is expected to be 12 paisa. However, there are still three days left for the new price announcement.

Global prices have fallen massively after stability returned to the Middle East following the Iranian-Israeli missile attack and the easing of tensions in the Red Sea. Globally, gasoline prices have fallen by $6.32 a barrel to $99.93, indicating a positive market shift.

The price of kerosene (KERO) is likely to drop by Rs9.49 per litre, and light diesel oil (LDO) by Rs6.54 per litre.

If the government allows the reduction as estimated, the price of petrol will come down to Rs275.09 per liter from the current rate of Rs288.49 per litre, the price of HSD will come down from Rs281.96 to Rs273.77 per litre, the price of KERO will come down to Rs173.85 from Rs183.34 , and LDO price is Rs164.12 from Rs170.66 per litre.

The government imposes a petroleum levy of Rs60 per liter on both petrol and HSD and is projected to collect Rs936 billion in the current fiscal year against the budget target of Rs869 billion.

The government expects that lower prices of petroleum products will help boost sales prices and consumption of petroleum products, which fell by 4% on a month-on-month basis in April 2024 and 6% on a year-on-year basis. Although the Oil and Gas Regulatory Authority (OGRA) is yet to submit an official summary to the Finance Division, early reports suggest that it is likely to propose a reduction in petrol and diesel prices for the second half of May 2024.

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