Govt likely to cut petrol, diesel prices by up to Rs30 per litre

ISLAMABAD: The federal government is expected to reduce petrol and diesel prices by up to Rs30 per litre in the upcoming fortnightly fuel price review, following a sharp decline in international oil prices amid easing concerns over supply disruptions in the Middle East.

The expected reduction comes after the government announced a major cut in fuel prices on June 19, when Prime Minister Shehbaz Sharif lowered the price of petrol by Rs74 per litre and diesel by Rs67 per litre, bringing their retail prices down to Rs299 and Rs311 per litre, respectively.

International crude oil prices have fallen by around 6% over the past week, with Brent crude declining 1.33% to $72.7 per barrel and US West Texas Intermediate (WTI) crude dropping 0.9% to $69.7 per barrel. Both benchmarks are currently trading at their lowest levels since late February.

The decline follows improving stability in the Middle East after the announcement of a diplomatic understanding between the United States and Iran in Switzerland, which helped ease fears of prolonged disruptions to global energy supplies.

The United States has also confirmed that commercial shipping through the Strait of Hormuz, which carries around one-fifth of the world’s oil and liquefied natural gas supplies, is returning to normal.

US Energy Secretary Chris Wright said maritime oil flows through the strategic waterway had nearly fully recovered, with approximately 20 million barrels of oil transported through the strait within a 24-hour period.

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Despite the improvement, Iran’s Islamic Revolutionary Guard Corps (IRGC) has warned commercial vessels to use only routes approved by Tehran, rejecting alternative shipping corridors developed in coordination with Oman and the International Maritime Organization (IMO).

According to the IMO, 57 vessels carrying around 1,100 seafarers have safely transited the Strait of Hormuz under a special evacuation plan since June 23.

Meanwhile, US Secretary of State Marco Rubio, during a visit to Bahrain, assured Gulf allies that freedom of navigation through international waterways would be protected, stressing that no country had the right to impose tolls or restrictions on commercial shipping.

Industry experts say the final adjustment in petroleum prices will also depend on the exchange rate and applicable taxes, but the sustained decline in global crude oil prices has created room for the government to pass on significant relief to consumers in the next pricing review.