Key Takeaways
- The Pakistan Business Forum (PBF) has called for a minimum reduction of Rs30 per litre in petrol and diesel prices.
- This comes as international crude oil prices have declined, providing fiscal space for relief.
- Increased Petroleum Development Levy (PDL) despite lower global prices is seen as counterproductive.
The Pakistan Business Forum (PBF) has urged the federal government to reduce petrol and diesel prices by at least Rs30 per litre in the upcoming fortnightly review, citing a significant decline in international crude oil prices. PBF President Khawaja Mehboob ur Rehman expressed concern over the government's decision to increase the Petroleum Development Levy (PDL) despite a sharp drop in global crude oil prices.
According to Rehman, benchmark US West Texas Intermediate (WTI) crude is currently trading at around USD72 per barrel, while UAE Murban crude is also trading in the low-to-mid USD70 range. These lower international prices should translate into substantial reductions in domestic petroleum prices instead of being offset by higher taxation.
The PBF President further noted that Saudi Aramco, the world’s largest oil exporter, has reduced the Official Selling Price (OSP) of its flagship Arab Light crude for August shipments to Asia by US$11 per barrel. This reduction reflects easing market conditions and softer demand, making it appropriate for Pakistan to pass on the benefit of lower oil prices to consumers and businesses.
Rehman warned that artificially keeping petroleum prices high through additional levies will only prolong inflation, increase business costs, and delay economic recovery. He stated, 'The government should ensure that the full benefit of declining international crude oil prices reaches the people.'
PBF Chief Organiser Ahmad Jawad echoed these concerns, expressing worry over the government’s decision to increase the PDL at a time when global crude oil prices have plummeted to a four-month low. He said, 'Instead of passing on the full benefit of declining international oil prices to consumers and businesses, the government has chosen to increase the tax burden, placing additional pressure on industry and the productive sectors.'
Jawad also highlighted that Pakistan’s annual trade deficit for FY26 had reached US$39.46 billion, an increase of 22 per cent over FY25, reflecting mounting pressure on the country's external sector. He noted that exports declined by 6 per cent to USD30.13 billion, while imports increased by 8.1 per cent to US$69.59 billion, widening the trade gap and highlighting the urgent need for pro-growth and export-oriented economic policies.
The PBF President further emphasized that high petroleum prices are increasing production costs and disrupting the industrial supply chain. Rising fuel costs have substantially increased transportation expenses for raw materials and finished products, weakened industrial competitiveness, delayed deliveries, and raised logistics costs for manufacturers and exporters.
Rehman concluded by saying, 'Maintaining elevated petroleum prices further erodes Pakistan’s competitiveness in international markets at a time when the country urgently needs higher exports, increased industrial production, and stronger foreign exchange earnings.'
The government should ensure that the full benefit of declining international crude oil prices reaches the people.
Khawaja Mehboob ur Rehman, PBF President
Instead of passing on the full benefit of declining international oil prices to consumers and businesses, the government has chosen to increase the tax burden, placing additional pressure on industry and the productive sectors.
Ahmad Jawad, PBF Chief Organiser
