Consumers are likely to enjoy a massive relief of up to Rs14.16 per litre in prices of petroleum products, which aligns with the reduction in international oil prices, effective from March 16, 2025.
The ex-depot price of petrol is expected to fall Rs14.16 to Rs241.47 per litre as compared to the existing price of Rs255.63 per litre. Petrol is primarily used in passenger cars and motorbikes and a big drop in its price will have a favourable impact on the consumers. Similarly, the diesel rate is also expected to register a downward trend. The ex-depot price of diesel is projected to drop Rs8.70 to Rs249.94 per litre against the current price of Rs258.64 per litre.
Diesel is widely consumed in transport and agriculture sectors. The crop harvesting season is on the cards and a reduction in the fuel price will leave a healthy effect on the masses.
Kerosene oil consumers can enjoy a reduction of Rs10.33 per litre as its price is anticipated to go down from Rs168.12 to Rs157.79 per litre.
Called a poor man’s fuel, kerosene oil is mainly consumed in remote areas of the country, especially the northern parts, for cooking purposes where liquefied petroleum gas (LPG) is not readily available. Pakistan Army is its key consumer in the northern regions.
Apart from these, the price of light diesel oil, which is used in industries, is expected to be decreased by Rs7.12 to Rs146.22 per litre compared to the existing price of Rs153.34.
There are several factors that contribute to the fluctuation in petroleum product prices. The movement in global oil prices is one major factor whereas other factors include government taxes, the inland freight equalisation margin, currency exchange rate and the premium on petrol import. At present, the premium is $6.6 per barrel.
The anticipated decrease in prices of all fuel sources will provide much-needed relief to the consumers, positively impact transportation costs and ease inflationary pressures.
In contrast, the Oil and Gas Regulatory Authority on Wednesday notified a slight increase in consumer prices of liquefied natural gas (LNG), effective from March 1, 2025.
The rise in re-gasified LNG prices comes in the wake of some increase in import incidentals.
The price for consumers of Sui Northern Gas Pipelines Limited (SNGPL) went up 0.37% from $12.90 to $12.94 per million British thermal units (mmBtu). Similarly, the price for consumers of Sui Southern Gas Company (SSGC) was raised 0.42% to $12.74 per mmBtu compared to the previous rate of $12.67. Pakistan, which has so far set up two LNG terminals, imports LNG from Qatar based on a long-term contract.
Cut in KE tariff
K-Electric (KE) consumers are also set to get a significant relief of Rs4.84 per unit in power tariff on account of fuel cost adjustment (FCA) for January 2025. In this regard, KE has submitted a petition to the National Electric Power Regulatory Authority (Nepra). The power-sector regulator has scheduled public hearing for March 20. If endorsed, the consumers of KE will receive a total relief of Rs4.69 billion.
KE calculated the provisional negative FCA for January 2025 on the basis of interim reference tariff for March 2023.
The private power utility submitted the required partial load, open cycle and degradation curves along with the startup cost for approval and an amount of Rs13.5 billion for the period July 2023 to January 2025 was accordingly pending for adjustment. Out of that, the regulatory authority set aside Rs5.4 billion in the FCA decision for November 2024.
KE requested the regulator to also consider the aforementioned adjustment of accumulated actualization of fuel cost so that recovery could be made from the negative fuel cost variation for December 2024 and January 2025 to ensure consumers were not burdened at a later stage.
For deliberation during the hearing, the following issues were framed: Whether the requested FCA is justified and whether KE has followed merit order while giving dispatch order to its power plants as well as in power purchases from external sources?
Whether the KE request for adjustment of accumulated actualization of fuel cost on account of partial load, open cycle and degradation curves along with the startup cost from July 2023 to January 2025, against the negative fuel cost variation, is justified?
The regulator has invited all interested parties to submit written and oral comments as well as objections as permissible under the law at the hearing.
