The Pakistani government has announced the prices of petroleum products for the next week, reducing the price of petrol by Rs 4 per litre, but it has decided to maintain the price of high-speed diesel. Although this move will provide limited relief to consumers, economists say its overall economic impact will be relatively limited.
According to the Petroleum Division, the new price of petrol has been fixed at Rs 377.78 per litre, while diesel will remain at Rs 380.78 per litre. The new prices will be implemented after 12 midnight.
According to economic analysts, the reduction in petrol prices is mainly a result of relative stability in global crude oil prices and limited changes in import costs. However, maintaining the price of diesel makes it clear that the government is still keeping fiscal balance and revenue targets in mind.
Diesel is considered a basic fuel in Pakistan’s economy, as freight, agriculture, public transport and several industrial sectors depend on it. This is why the change in the price of diesel has a direct impact on inflation and the prices of essential commodities.
Experts say that a reduction of Rs 4 per litre in the price of petrol will definitely provide some relief to people using private vehicles; however, the chances of a significant reduction in inflation at the public level are limited because diesel is used as the main fuel in the major transportation sector.
Economic circles believe that future prices will depend on the global oil market, the geographical situation of the Middle East, the value of the rupee and the government’s tax policy. If crude oil prices remain low in the global market, there may be room for further reduction in Pakistan.
For now, the government’s latest decision is definitely a positive signal for the public; however, its impact on the overall inflation trend in the country will be clear in the coming weeks.