The government may reduce petroleum prices by up to Rs12 per litre starting June 15, following a $5.14 decrease per barrel in global oil prices.
Since April 16, petrol prices have dropped by Rs24 per litre and diesel by Rs20 per litre. Insider sources revealed that a significant internal disagreement between the Prime Minister and the Finance Minister over petrol pricing, which occurred late at night and involved discussions with the IMF, was the reason for the government’s sudden shift in stance on June 1.
In the current fiscal year, the government collected over Rs900 billion in petroleum development levy from petroleum product sales, exceeding the annual target of Rs869 billion in just 11 months.
Following the price cuts, demand for petroleum products surged to a nine-month high of 1.4 million tons in May 2024. Total consumption from July 2023 to May 2024 reached 13.8 million tons.
Myesha Sohail, an analyst from Topline Research, noted that the government amassed Rs907 billion through the petroleum development levy in the first 11 months of FY24. Based on monthly averages of Rs80-85 billion, she projected that total collections could reach between Rs990 billion and Rs1 trillion by the end of the fiscal year.
