Petroleum products could become cheaper by more than Rs55 per litre after Prime Minister Shehbaz Sharif directed authorities to review the price increase implemented on March 7, sources said on Thursday.
According to sources, work has begun on a working paper being prepared jointly by the Petroleum Division, Pakistan State Oil (PSO) and the Oil and Gas Regulatory Authority (OGRA) to assess the impact of a significant reduction in domestic fuel prices.
Sources said the prime minister had instructed Petroleum Minister Ali Pervaiz Malik to examine ways to rectify the increase made on March 7 after expressing dissatisfaction over the magnitude of the hike.
Officials are exploring options to pass on the benefit of falling international oil prices to consumers. Government circles are reportedly considering a reduction of more than Rs55 per litre if calculations based on current market trends support such a move.
The review comes after a sharp decline in international crude oil prices. Sources said the price of Arab Light crude, the benchmark used for determining petroleum product prices in Pakistan, has fallen by around $16 per barrel over the past week to nearly $80 per barrel.
The drop in global oil prices has increased expectations of a substantial cut in domestic fuel prices in the next pricing review.
However, sources said some oil marketing companies have expressed concerns over the possibility of a sudden reduction. Industry stakeholders are said to be lobbying policymakers to avoid a one-time cut of more than Rs55 per litre, arguing that such a move could create inventory-related losses for companies holding stocks purchased at higher prices.
According to sources, some companies have proposed that any reduction be implemented in phases rather than through a single adjustment.
Officials involved in the discussions said various pricing scenarios are being examined and no final decision has yet been taken. The working paper being prepared by the Petroleum Division, PSO and OGRA is expected to form the basis for recommendations to be presented to the prime minister.
If approved, the reduction would provide significant relief to consumers facing high transportation and energy costs and could also have a broader impact on inflationary pressures across the economy.