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Govt likely to maintain status quo on petrol, diesel prices despite decline in global rates

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  • Petrol, diesel prices recorded significant decline in global market. 
  • Average price of diesel fell to around $100 per barrel globally.
  • Price of petrol dropped to $90 per barrel for next review.

KARACHI: Despite a major reduction in the international prices of diesel and petrol, the government has decided not to decrease the prices for local consumers to adjust the previous exchange losses as well as to raise taxation on the fuels, The News reported citing sources. 

The petrol and diesel prices in the global market have recorded a significant decline and average fortnight prices of both products would be taken for the next price revision on February 28, 2023.

According to the oil industry sources, the average price of diesel for the next fortnightly review dropped by $7 per barrel, which in terms of the Pakistani rupee comes to a Rs30 per litre reduction for the domestic price of diesel. The average price of diesel in the global market fell to around $100 per barrel compared to $107 per barrel in the previous fortnight.

The average price of petrol dropped to $90 per barrel for the next review of prices compared to $93 per barrel in the last fortnightly review of prices, translating into a Rs10 per litre reduction for the consumers in the local market.

Sources pointed out that rupee appreciation against the dollar in the last two weeks also helped cut the import price of diesel and petrol, as the average exchange rate dropped by Rs8 for the next review of prices.

Oil industry sources were however not hopeful about any major reduction in the prices of diesel and petrol for domestic consumers as the government was expected to adjust the exchange losses, which it did not pass on fully to the oil sector in the last many reviews.

For instance, an exchange loss adjustment of Rs88 per litre was due on diesel, but the government only transferred Rs12 per litre on this head, while the remaining was still to be adjusted. 

“It is likely that the government would pass on partially the adjustment because of getting space on the exchange rate side,” sources said.

Likewise, an exchange loss adjustment of Rs34 per litre was due on petrol, but the government only gave Rs12 per litre to the oil industry.

Sources said that under the conditions put down by the International Monetary Fund (IMF), the government might increase the petroleum levy (PL) on diesel to Rs50 per litre as it has now got room to do it. Currently, it is Rs40 per litre on diesel.

Sources expect a Rs10 per litre cut in diesel if the government does not impose GST, which otherwise would deprive the local consumers of the drop in diesel prices in the global market.

Official industry sources do not expect any reduction in the price of petrol for the local consumers, which otherwise would have been down by Rs10 as per the trends of its price in the global market.

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In January 2025, RDA inflows reach 9.564 billion USD.

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Remittances under the Roshan Digital Account (RDA) increased from US $9.342 billion at the end of 2024 to US $9.564 billion by the end of January 2025.

The most recent data issued by the State Bank of Pakistan (SBP) revealed that remittance inflows in January totaled US$222 million, compared to US$203 million in December and US$186 million in November 2024.

Millions of Non-Resident Pakistanis (NRPs), including those who own a Non-Resident Pakistan Origin Card (POC), desire to engage in banking, payment, and investing activities in Pakistan using these accounts, which offer cutting-edge banking options.

Nearly 778,697 accounts were registered under the scheme by the end of January 2025, according to the data.

By the end of January, foreign-born Pakistanis had contributed US $59 million to Roshan Equity Investment, US $479 million to Naya Pakistan Certificates, and US $799 to Naya Pakistan Islamic Certificates.

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FBR lowers Karachi’s built-up structure property valuation rates

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A year-by-year breakdown of the depreciation value of residential and commercial built-up properties is included in the updated property valuation rates for Karachi that the FBR has announced.

The notification said that built-up structural values on residential property will be gradually reduced.

A residential home’s built-up structure, which is five to ten years old, will lose five percent of its worth.

In a similar vein, constructions between the ages of 10 and 15 will lose 7.5% of their value, while those between the ages of 15 and 25 would lose 10%. Built-up structures that are more than 25 years old will be valued similarly to an open plot.

Furthermore, age will also be used to lower the valuation of built-up properties, such as apartments and flats.

Structures that are five to ten years old will depreciate by ten percent, while those that are ten to twenty years old will depreciate by twenty percent. A 30% depreciation will be applied to properties that are 20 to 30 years old, while a 50% reduction will be applied to those that are above 30 years old.

In terms of commercial built-up properties, buildings that are 10 to 15 years old will lose 5% of their value, while those that are 15 to 25 years old will lose 8%. The value of properties that are more than 25 years old will drop by 10%.

In contrast, there would be a 15% boost in the value of commercial properties in the Defence Housing Authority (DHA) that face any Khayaban.

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Remittances Increase 25.2% in January 2025: $3.0 Billion Inflow

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Remittances from Pakistani workers totalled US$3.0 billion in January 2025, representing a 25.2% increase from the previous year.

The cumulative remittances for July through January of FY25 were 20.8 billion dollars, up 31.7 percent from 15.8 billion dollars during the same period in FY24.

In January 2025, the United States of America contributed 298.5 million dollars, the United Kingdom contributed 443.6 million dollars, the United Arab Emirates contributed 621.7 million dollars, and Saudi Arabia contributed 728.3 million dollars.

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