By Staff Reporter
KARACHI: The interim government cut gasoline and diesel prices by more than 4 percent for the second half of December, as global oil prices fell, and the local currency strengthened.
The Finance Ministry said it has reduced the price of gasoline by Rs14 to Rs267.34 a liter and diesel by Rs13.5 to Rs276.21 a liter in a statement on Friday. The new prices will be effective from Dec. 16 to Dec. 31.
The move will relieve consumers and businesses, struggling with high inflation and a sluggish economy since the country entered a $3 billion bailout program with the International Monetary Fund (IMF) in July.
The IMF program has required Pakistan to implement tough fiscal and monetary measures, including raising taxes, cutting subsidies, and hiking interest rates.
The price reduction also reflects the improved outlook for the rupee, which has appreciated by about 7 percent against the U.S. dollar since October, thanks to higher remittances, foreign inflows, and a narrowing current account deficit. The rupee was trading at 283.26 per dollar on Friday, up 0.09 percent from its previous close.
Globally, crude oil prices have declined over the last month. The WTI ended the week at $71.79 per barrel on Friday, down from $76.79 a month ago. Brent crude oil prices were $76.90 per barrel, down from $81.18 a month ago.
The Finance Ministry also lowered the prices of kerosene and light diesel oil, which are mainly used by low-income households and the military, by 5 percent and 6.4 percent, respectively. The price of kerosene oil, whose consumption increases significantly during winters in remote areas, was reduced by Rs10.14 to Rs191.02 per liter, while the tariffs of light-diesel oil (LDO) were cut by Rs11.29 to Rs164.64 per liter.
The ministry said the price adjustment was based on the recommendation of the Oil and Gas Regulatory Authority, which monitors the international and domestic oil markets.
Pakistan imports about 80% of its oil needs, and the government sets the prices of petroleum products every 15 days.
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