Small reduction in fuel prices expected from Sept 1

ISLAMABAD, AUG 30 (DNA): Amid devastating floods caused by cloudbursts, landslides, and flash deluges across Punjab — with spillover effects anticipated in Sindh — Pakistan is expected to see a slight reduction in petroleum product (POL) prices from September 1, offering only modest relief to consumers.

Official estimates suggest petrol may drop by Re0.61 per litre, while high-speed diesel (HSD) could see a larger cut of Rs3.13 per litre. Kerosene oil is projected to decline by Rs1.57, and light diesel oil (LDO) by Rs2.61 per litre.

These adjustments stem from a marginal decrease in global crude prices. Brent crude was recorded at $67.30 per barrel on August 16, rose to $68.18 on August 18, and then slipped to $66.73 by August 27. Though limited, the easing in international markets has shaped Pakistan’s local pricing outlook.

Accordingly, the new sale price of petrol may set at Rs264.00 per litre (down from Rs264.61), HSD at Rs269.86 per litre (down from Rs272.99), kerosene oil at Rs176.70 per litre and LDO at Rs159.55 per litre.

The price cuts come against the backdrop of projections by leading global institutions. Goldman Sachs forecasts Brent to average between $60–66 per barrel through the remainder of 2025, potentially falling into the low $50s in 2026 if supply surpluses materialise.

Meanwhile, the US Energy Information Administration (EIA) expects Brent prices to dip below $60 per barrel in Q4 2025, with levels hovering around $50 throughout 2026 due to rising global inventories and output.

The current price of petroleum products includes a significant petroleum levy, carbon levy, freight burden, customs duty and deemed duty.

Consumers currently pay petroleum levy and carbon levy of Rs80.52 per litre on petrol, Rs79.51 on HSD and Inland Freight Equalisation Margin (IFEM) of Rs8.05 on petrol, and Rs6.20 on HSD. The premiums on petrol looks at $6.37 per barrel, and $3.20 per barrel on HSD.

Despite the disaster-struck landscape, the marginal reduction in POL prices may provide limited financial respite to households and industries already grappling with high inflation and disrupted supply chains.