The caretaker government has decisively declared a significant drop in petrol prices, providing relief to Pakistani consumers everywhere. According to a notification released by the Finance Division, the price of petrol would drop by Rs8 per litre starting on January 16 and will remain that way for the following two weeks.
This decision is in accordance with the recommendations given by the Oil and Gas Regulatory Authority (OGRA) and demonstrates the government’s commitment to responsive and economically advantageous policies.
According to the official announcement, the ex-depot price of fuel has been lowered to Rs259.34 per litre from Rs267.34 per litre. This reduction is expected to ease the financial strain on consumers and support economic stability.
Government of Pakistan has reduced Petrol price by 8 rupees, whereas price of High Speed Diesel has been maintained. pic.twitter.com/wIhfAVBW5t
— Ministry of Finance, Government of Pakistan (@Financegovpk) January 15, 2024
CURRENT PETROLEUM LEVY PAKISTAN
However, the adjustment in petrol prices does not extend to high-speed diesel, as no changes were mentioned for its pricing. Similarly, the prices of light-diesel oil and kerosene oil remain unaffected by the recent announcement.
It’s worth noting that the government has already reached the maximum permissible limit for the petroleum levy at Rs60 per litre, as stipulated by law, on both petrol and high-speed diesel. This move is in line with the government’s commitment to collect Rs869 billion as a petroleum levy during the current fiscal year, as agreed upon with the International Monetary Fund (IMF). There are hopes that the collection may surpass Rs950 billion by the end of June.
Petroleum and electricity prices play a pivotal role in driving inflation, which stood at 29.7% in December, according to the Consumer Price Index. Currently, the government imposes approximately Rs82 per litre in taxes on both petrol and high-speed diesel.
While the general sales tax on all petroleum products is presently set at zero, the government levies Rs60 per litre as petroleum development levy on petrol and Rs50 each on high-speed diesel, high-octane blending component, and 95 research octane number (RON) petrol. These measures aim to strike a balance between meeting fiscal targets and providing relief to the general public.
INTERNATIONAL OIL MARKET
In terms of technical analysis, US Crude Oil has experienced volatile intraday trading in 2024, with barrel prices oscillating within a rough channel between $74.00 and $70.50. The near-term price action remains closely tied to the 200-hour Simple Moving Average (SMA) near $72.50.
Daily candlesticks reveal WTI consolidating below the 200-day SMA at the $78.00 mark, with a descending 50-day SMA creating a technical ceiling. This setup is exerting downside pressure on near-term price action from $74.00, adding an additional layer of complexity to the market dynamics.
CFDs on Brent Crude oil posted an intraday high of $78.48 and intraday low of $78.27. Oil is currently trading at $78.33 (3:18am Tuesday, 16 January 2024 (GMT+5) Time in Pakistan).
CFDs on WTI Crude Oil posted an intraday high of $72.90 and intraday low of $71.27. Oil is currently trading at $72.44 (3:20am Tuesday, 16 January 2024 (GMT+5) Time in Pakistan).
