Government Set to Slash Petroleum Prices as Cheaper Russian Oil Arrives

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Pakistan Petroluem Products

In a bid to provide relief to the inflation-hit masses, the Pakistani government is expected to announce a significant reduction in the prices of petroleum products effective from June 1. The decision comes as the arrival of cheaper Russian oil is anticipated in the first week of the June.

Experts predict a reduction of Rs10 per litre in petrol prices and Rs5 per litre in high-speed diesel prices. The downward trend in ex-refinery rates, ranging from Rs10 to Rs12 for petrol and Rs5 to Rs6 for high-speed diesel, has paved the way for the anticipated price cuts. However, the final prices will also be adjusted based on the exchange rate difference.

Relevant Read: Petrol and diesel shortages will hit Pakistan

The expected price reduction will come as a relief for the population grappling with record price hikes, particularly for essential commodities like food items. Rural areas have been hit harder by food inflation compared to urban regions.

Earlier this month, the government had already reduced the prices of high-speed diesel by Rs30, petrol by Rs12, kerosene by Rs12, and light diesel oil by Rs12. These previous reductions, coupled with the upcoming price cuts, aim to ease the burden on the public.

In parallel, the first oil tanker carrying 100,000 tonnes of crude oil from Russia recently arrived in Oman on May 27. The oil will be transported to Pakistan via smaller ships due to the capacity limitations of Pakistani ports, which cannot accommodate vessels carrying over 50,000 tonnes of goods.

While the exact impact of Russian oil imports on petroleum, oil, and lubricant (POL) prices is yet to be determined, various estimates suggest a substantial reduction. Some circles even speculate a potential decrease of up to Rs100 in petrol rates. The arrival of Russian oil is expected to bring about positive changes in the energy market, benefitting consumers across the country.

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