By Staff Reporter
ISLAMABAD: The government on Tuesday reduced petrol and diesel prices by 3.1 percent and 2.5 percent, respectively, effective immediately, as global crude costs declined.
The price of petrol was cut by Rs8.47 to Rs260.96 per liter, while high-speed diesel was reduced by Rs6.70 to Rs266.07 per liter, according to a finance ministry statement. The new rates will be in effect until August 31.
This marks the second consecutive fortnight of price reductions.
The move, announced two days ahead of schedule, was directed by Prime Minister Shehbaz Sharif as an “Independence Day gift” to the nation, celebrating its 78th anniversary today.
“The Oil and Gas Regulatory Authority (OGRA) has worked out the consumer prices of petroleum products, based on price variations in the international market,” the Finance Division said in a notification.
Global petrol prices fell by over $3 per barrel in the past fortnight, prompting the government to pass on the benefit to consumers. The average international petrol price has fallen to $84 per barrel, while high-speed diesel has decreased to approximately $91 per barrel over the last fortnight. Import premiums on petrol and HSD have remained relatively stable at around $9 and $5 per barrel, respectively, during the current fortnight.
However, the rupee has slightly depreciated against the US dollar over the same period.
The government cut petrol and high-speed diesel prices by Rs6.17 and Rs10.86 per litre, respectively, on July 31, offering slight relief to consumers amid high inflation where fuel and electricity costs have been major drivers of price increases. That reduction follows a price hike in July, when petrol and HSD prices increased by Rs17.44 and Rs15.74 per litre, respectively.
The government has increased the maximum limit of the petroleum levy to Rs70 per litre in the finance bill, aiming to collect Rs1.28 trillion in the next fiscal year, up from Rs1.019 trillion in the previous year.
Currently, the government charges around Rs78 per litre in taxes on petrol and HSD, including a Rs60 per litre petroleum development levy and an Rs18 per litre custom duty. Distribution and sale margins add another Rs17 per litre.
Notably, the petroleum development levy remains unchanged despite a Rs10 per litre increase in the federal budget for 2024-25.
Pakistan revises petroleum prices every fortnight, and this reduction may help alleviate some pressure on consumers, as high petroleum and electricity prices have driven inflation in the country. Petrol is widely used in private transport, while diesel price increases are considered highly inflationary due to its impact on heavy transport vehicles and food prices.
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