ISLAMABAD - The federal government has decided to pass the benefit of reduction of petroleum prices in the international market on to people. The benefit would be given in the next review on July 15.

The directives were issued by Prime Minister Shehbaz Sharif while chairing a meeting here yesterday which reviewed the reduction of petroleum prices in the international market and directed to pass on the full benefits of the fall in oil prices in the global market to the people with full transparency.

According to an official communiqué issued by the  Prime Minister Office, Prime Minister Shehbaz Sharif has asked Ministries of Finance and Petroleum  to  submit to him a summary of the reduction in oil prices so that in the next review which is expected on July 15 it could be approved.

The prime minister told the meeting that the people had a difficult time, and now they have the right to get full relief. He said, “We will take every step for the provision of relief to the masses who suffered heavily because of inflation caused by the previous government.”

Meanwhile, official sources have said that Pakistanis would likely to get a sufficient relief in POL prices in near future, with crude oil prices hovering at $99 per barrel, however, with the predicted drop of the crude oil rates to $65 per barrel by the end of the year could possibly reduce the cost of petrol for local consumers by up to Rs80/litre.

The government has yet to jack up Petroleum Levy on Petrol to Rs 50/litre from the existing Rs10/litre and General Sales Tax from zero to 17pc, therefore, the chances of big reduction in oil prices are very little, officials sources told The Nation.

However, the source said that in case the crude oil price dropped to $65/barrel by the end of ongoing year it can bring a relief of Rs 70-80/litre in the prices of Petrol (Motor Gasoline) for Pakistani consumers.

PM seeks summary after oil prices in international market reduced to $99 per barrel

Analysts have predicted a possible collapse of crude oil price in the international market to $65/barrel by the end of this year and further decline to $45 by end-2023.

When contacted expert associated with oil Industry were of the strong opinion that decline for short term will not provide any relief to the consumers. Initially the government will try to meet its Petroleum Levy and GST targets, and if the slump lingers on for a longer time the consumers will see big decline in the prices of up to Rs80/litre.

“I personally believe that they the government) shouldn’t bring down the prices for a quarter or half or so to stabilize the economy and bring down the dollar,” said in expert linked to oil industry.

The crude oil prices at 65/barrel with an average platts plus incidentals and duty will bring the ex-refinery price at $72/barrel.

With the rupee-dollar parity at current 207/dollar the ex-refinery price of petrol will be Rs93.74/litre. The inclusion of various margins and IFEM will add Rs 13.17/liter and application of Rs50/litre Petroleum Levy will take it to Rs 156.91/litre without GST. After GST, the consumer price of Petrol will Rs183.58/litre. At this scenario the consumers can get a relief of Rs 65.16/litre.