By Staff Reporter
ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday approved a surprise cut in fuel prices, trimming petrol by 2.3 percent and high-speed diesel by 3.8 percent for the next fortnight, as global market costs decline.
The price of petrol will drop to Rs269.43 per liter, down Rs6.17, while high-speed diesel will fall to Rs272.77 per liter, a decrease of Rs10.86, according to a statement from state broadcaster PTV.
“The Oil & Gas Regulatory Authority (OGRA) has worked out the consumer prices of Petroleum Products, based on the price variations in the international market,” the statement read.
The reductions exceed earlier estimates of a 1.2 percent and 3.1 percent decline for petrol and diesel, respectively, and follow two consecutive price hikes.
The country revises petroleum prices every fortnight.
The government increased the prices of petroleum products by Rs9.99 and high-speed diesel by Rs6.18 per liter on June 30.
The fuel prices had been increased after Pakistan and the International Monetary Fund reached an agreement for a $7 billion, 37-month loan program that comes with tough measures.
The latest cuts are attributed to lower international market prices and import premiums, with petrol and diesel declining by $2 and $3 per barrel in the last fortnight.
Kerosene oil prices will also decrease by 3.4 percent to Rs177.39 per liter, while light diesel oil will drop by 3.4 percent to Rs160.53 per liter.
The move comes as the government seeks to balance consumer relief with revenue goals, having increased the maximum limit of petroleum levy to Rs70 per liter in the current year’s budget.
The coalition government of Prime Minister Sharif aims to collect Rs1.28 trillion in the next fiscal year, up from Rs960 billion in the last fiscal year.
The latest decrease will be a slight relief for the masses in a country where petroleum and electricity prices have been the key drivers of high inflation.
Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers while any increase in the price of diesel is considered highly inflationary as it is mostly used to power heavy transport vehicles and particularly adds to the prices of vegetables and other eatables.
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