While consumers in Pakistan are poised for a substantial reduction in petroleum prices from October 16, the full extent of the relief remains uncertain as the government considers potential increases in levies and taxes that could offset the benefits, according to media reports.

Sources indicate a possible petrol price drop of Rs 6.10 per litre and a Rs 1 decrease for high-speed diesel (HSD). The prices of kerosene and light diesel oil (LDO) are also anticipated to fall by Rs 2.75 and Rs 1.64 per litre, respectively.

The final decision, however, rests with the Ministry of Finance. Officials have cautioned that the ultimate benefit passed on to the public will depend on whether the government chooses to raise petroleum duties. The Oil and Gas Regulatory Authority (OGRA) is scheduled to forward its official summary to the ministry tomorrow for the final notification.

The oil industry has already submitted its price-working report to the regulator. Notably, these initial calculations do not factor in any exchange rate adjustments, which could further influence the final prices.

This anticipated price revision is underpinned by a decline in ex-refinery costs observed since October 1. According to working data, the ex-refinery price of petrol has diminished by 3.76%, while HSD saw a marginal 0.6% decrease. Similarly, kerosene and light diesel costs have fallen by 1.8% and 1.1%.

The local trend mirrors a downturn in the global market, where international petrol prices have fallen by $2.80 per barrel to $73.71. A corresponding 35-cent drop in the premium on petrol has also contributed to the lower cost basis.