A small reduction in petroleum prices is anticipated tonight following approval from Prime Minister Shehbaz Sharif, according to media reports. However, a major drop is unlikely due to pressure from the International Monetary Fund (IMF).
The Oil and Gas Regulatory Authority (OGRA) had recommended a price cut of 6 to 10 rupees per liter, based on a decrease in international crude oil prices from September 1 to September 14. These global prices have fallen by 8 to 12 rupees per liter during this period.
Despite this, the upcoming IMF Executive Board meeting on September 25, which aims to formalize a staff-level agreement, has introduced stringent conditions. The IMF’s influence means that the anticipated reduction in petroleum prices will be modest, likely between 2 to 5 rupees per liter. This adjustment is expected to help the government maintain higher revenue levels, as required by IMF stipulations.
Yasir Raza Chaudhry, Secretary of the Pakistan Petroleum Association, noted that while international crude oil prices were $90 per barrel in April 2024, they have now dropped to approximately $70 per barrel, marking the lowest point in the last six months. This significant reduction underscores the disparity between global price trends and domestic price adjustments.
As a result, consumers should prepare for only a minor decrease in petroleum prices today, with the government balancing economic pressures and IMF demands.
