By Staff Reporter
ISLAMABAD: The government slashed petrol prices by Rs7.54 per litre late Thursday while raising the cost of high-speed diesel (HSD) by Rs1.48 per litre for the next two weeks, reflecting shifts in global oil markets.
The move, which comes as regulatory lapses in the petroleum sector draw criticism, offers relief to households reliant on petrol but risks stoking inflation through higher diesel costs.
In a press release issued Friday, the Finance Division set the new price of petrol at Rs264.61 per litre and HSD at Rs285.83 per litre. The decision followed “a review of prevailing international market trends” and recommendations from the Oil and Gas Regulatory Authority (Ogra) and relevant ministries, the statement said.
Petrol powers motorcycles, rickshaws, and private vehicles, hitting the wallets of middle- and lower-income families, while HSD drives heavy transport, agricultural machinery, and trains, making it a key driver of food and goods prices.
The adjustments mark a shift after four straight fuel price hikes. Global oil prices softened over the past fortnight, with the import premium on petrol tumbling nearly one-third, from about $9.70 to $6.75 per barrel, as regional tensions eased. Industry estimates had pegged petrol’s ex-depot price to fall by around Rs9 per litre (3.3%) and HSD by Rs3.50 per litre (1.3%), based on prevailing tax rates and final cost calculations.
Despite the petrol price cut, the government continues to rake in roughly Rs98 per litre on both petrol and diesel through various levies, even with a zero general sales tax (GST) rate on petroleum products. This includes a petroleum levy and climate support levy (CSL) of Rs77.01 per litre on diesel and Rs78.02 per litre on petrol and high-octane blends, with Rs2.25 per litre tied to the CSL alone. Customs duties add Rs20-21 per litre on both fuels—whether imported or locally refined—while distribution and dealer margins tack on another Rs17 per litre.
Petrol and HSD remain cash cows for the government, with monthly sales averaging 700,000-800,000 tonnes combined, dwarfing kerosene’s 10,000-tonne demand. The Finance Division collected Rs1.161 trillion via the petroleum levy in the 2024-25 fiscal year and forecasts a 27% jump to Rs1.470 trillion this year.
Separately, Ogra slashed the price of liquefied petroleum gas (LPG) by Rs17.7 per kilogramme, the third consecutive monthly reduction. In a notification available with Dawn.com, the regulator set the new consumer price for an 11.8kg cylinder at Rs2,541.36 for August, down from Rs2,750.6 in July. The maximum per-kilogram price is now Rs215.37, effective Friday.
“These prices shall be regulated as the maximum LPG price at all levels of the supply chain for indigenous as well as imported LPG,” Ogra said. The new producer price for an 11.8kg cylinder stands at Rs2,054.02, tied to Saudi Aramco’s contract price and the US dollar exchange rate. LPG cylinder prices have steadily declined from Rs2,892.91 in May to Rs2,838.31 in June and Rs2,750.6 in July.
The price changes unfold against a backdrop of mounting concerns over the petroleum sector’s oversight. Earlier this month, a parliamentary panel warned of a “poor regulatory environment,” spotlighting safety risks after officials revealed that nearly half of the estimated 2,000 LPG-handling bowsers lack registration. Only 800 are logged with the Department of Explosives, and just 247 hold Ogra-issued licenses—a gap lawmakers called a significant oversight lapse.
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