ISLAMBAD (Dunya News/Web Desk) – The inflation-hit people in Pakistan may have some good news as a big drop in petroleum product prices is expected today under the fortnightly review after the government slashed the rates with effect from May 1 as well.
Previously, the government had slashed the petrol prices by Rs5.45 and of diesel by Rs8.42 per litre respectively.
Earlier in September 2023, the fuel prices in Pakistan had hit an historic high of over Rs330 per litre during the caretaker government’s tenure, which run the country from August last till February 2024 before the delayed general elections.
Read more: Don't raise tax rates, expand tax net. It will also help arrest inflation: Citibank
It is declining oil prices in international market which are helping the government to lower the POL prices amid a persistent dip in inflation as reflected by the consumer price index (CPI) for the past four months.
The move is expected given the fact that petrol prices in global market have seen a $7.26 per barrel cut, meaning that the fuel rate in the domestic market may dip by Rs12.84 per litre with effect from midnight (May 16).
At the same, the diesel prices are expected to be reduced by Rs8.30 per litre after a decline of $4.68 a barrel.
The current petrol and diesel prices in global market are $98.99 and $99.37 per barrel respectively.
For April, the official statistics showed the CPI had dropped to 17.6 per cent – the lowest since May 2022 – a development that bodes for the coalition government led by Prime Minister Shehbaz Sharif.
Read more: Power basic tariff hike is one of the IMF demands
It is interesting note that the oil prices had declined over well over 100 per cent globally during the last government of former premier Nawaz Sharif, which helped the PML-N lower the inflation after years of record inflation.
And the PML-N is set to benefit from the trend yet again – although the scale will not be the same – mainly due to a weaker rupee when compared to the exchange witnessed during 2013-17, which makes the imports expensive.
The reduction in fuel prices as well as annual inflation will certainly benefit the PML-N which is set to accept tough IMF conditions during the talks starting today for a bigger and longer bailout programme.
Simultaneously, the Punjab government under PML-N Chief Minister Maryam Nawaz has been able to ensure effective price control which lowered the food prices, including that of wheat flour. It also lowered the roti prices in the provinces.