Government May Cut Petrol Prices in Response to Increased Smuggling and Decreased Demand

Karachi, In response to declining global oil prices and challenges posed by increased petrol smuggling within the country, the government of Pakistan is considering reducing petrol prices by Rs 10 to Rs 12 per liter for the next 15 days. An official announcement is expected on Wednesday.

According to Federation of Pakistan Chambers of Commerce and Industry, the reduction in petrol prices is being contemplated due to a drop in the consumption of imported petrol and a glut of stock within the country. The senior leader of the FPCCI's standing committee for energy and the petroleum and CNG sector, Malik Khuda Bakhsh, highlighted that smuggling has significantly impacted the local market, leading to decreased demand for refined petrol and causing refineries to halt production.

Khuda Bakhsh explained that 60 to 70 percent of the petrol in the market is smuggled and sold openly, undermining the sales of legally refined petrol. This situation has forced refineries to accumulate large stocks of oil, prompting considerations for a price reduction. The widespread availability of smuggled petrol not only affects the government's tax revenues but also damages vehicles due to its poor quality.

The issue has been repeatedly raised by Abdul Sami Khan, chairman of the Pakistan Petroleum Dealers Association, who has informed government representatives about the market disruption caused by illegal smuggling. However, effective measures to curb the smuggling have yet to be implemented.