By Staff Reporter
ISLAMABAD: The government has reduced retail prices of high-speed diesel by Rs4.79 a liter and petrol by Rs2 a liter effective Dec. 1, passing on the benefit of softer international crude prices in the second half of November.
The Oil and Gas Regulatory Authority recommended the cuts, which the Petroleum Division approved on Sunday evening. High-speed diesel will now cost Rs279.65 a liter, while petrol will be priced at Rs263.45 a liter for the next fortnight. “The government has revised the prices of the petroleum products based on recommendations of Ogra (Oil and Gas Regulatory Authority),” the Petroleum Division notification said.
The reduction in high-speed diesel, the fuel that powers most trucks, buses, trains and farm equipment, is likely to ease cost pressures on food transportation and agricultural activity. HSD price changes have a more direct bearing on headline inflation because of their widespread use in heavy-duty vehicles, tractors, tube-wells and threshers. Petrol, consumed mainly by motorcycles, rickshaws and private cars, affects household budgets of the middle and lower-middle classes more directly.
Despite the cuts, the government continues to collect close to Rs99 a liter in total taxes and levies on both products. The ex-refinery price incorporates roughly Rs80.52 a liter of petroleum levy and climate-support levy on petrol and Rs79.50 on diesel, while general sales tax remains zero. An additional Rs17-18 a liter in customs duty applies regardless of whether the product is imported or produced locally, and dealers and oil marketing companies receive around Rs17 a liter in combined margins.
Monthly consumption of petrol and HSD ranges between 700,000 and 800,000 tonnes, dwarfing kerosene demand of about 10,000 tonnes. The cuts come against the backdrop of robust petroleum-levy collections. In fiscal year 2024-25, the government collected Rs1.161 trillion from the levy, with the current year’s budget targeting Rs1.47 trillion — a 27% increase. Global Brent crude averaged lower in the Nov. 16-30 pricing period compared with the first half of the month, enabling regulators to lower domestic pump prices for the second consecutive fortnight.
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