The Pakistani government has kept petrol and diesel prices unchanged for the first half of April, disappointing consumers who had predicted large falls in fuel prices after the recent drop in global crude prices. However, kerosene and light diesel prices will drop by PKR10 ($0.09) per litre, to PKR180.29 and PKR174.68, respectively. Some observers had suggested that prices would fall by as much as PKR14 per litre. Despite the recent slump in global oil prices, Pakistan’s lack of refining capacity has meant that it has struggled to take full advantage of falling import costs. The country imposes high taxes on fuel to raise revenue, relying on the fuel sector to generate nearly a third of its revenues, in addition to battling high consumption rates. This means that drop in global oil prices often benefit only the wealthy and do not reach the general population. Furthermore, as we noted in February, oil smugglers are still thriving due to the lower prices, causing concern for the state, which could lose a potential revenue source to an illicit underground economy.
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