The government announced on Friday a significant reduction in the prices of petrol and high-speed diesel (HSD) for the next fortnight. Petrol prices have been slashed by Rs10.2 per litre, while HSD prices have been reduced by Rs2.33 per litre, according to a notification from the finance ministry.
The new price of petrol is set at Rs258.16 per litre, and HSD is priced at Rs267.89 per litre. The Prime Minister’s Office has described this reduction as a gift from Prime Minister Shehbaz Sharif to the public in anticipation of the upcoming Eidul Azha holiday. The decline is fourth in a row, taking the cumulative relief to Rs35 per litre.
The finance ministry noted that the prices of petroleum products had shown a mixed trend in the international market over the last fortnight. The Oil and Gas Regulatory Authority (Ogra) calculated the new consumer prices based on these international market variations.
In the past two weeks, international petrol prices dropped by about $3.75 per barrel, and HSD prices fell by approximately $2.7 per barrel. This follows previous declines of $12 and $8 per barrel in petrol and HSD prices, respectively, over the last two fortnights.
Currently, petrol prices have decreased to slightly over $90 per barrel from approximately $94 per barrel, while HSD prices have reduced to $95 from $98 per barrel. The import premium on petrol has also seen a minor decrease, dropping to $9.5 per barrel from $9.7. Additionally, the value of the rupee has remained stable.
The final prices also incorporate the Petroleum Development Levy (PDL), with the government reaching the maximum permissible limit of Rs60 per litre under the law for both petrol and HSD. This levy has generated Rs720 billion for the government in the first nine months of the fiscal year ending March 31. The government initially set a budget target to collect Rs869 billion in PDL for the current fiscal year under commitments made to the International Monetary Fund (IMF), now revised to Rs960 billion.
The government is currently imposing about Rs80 per litre in taxes on both petrol and HSD, including around Rs19-20 per litre in customs duty. This is despite a zero general sales tax on all petroleum products.
Petrol and HSD are significant revenue sources, with monthly sales ranging from 700,000 to 800,000 tonnes, compared to a mere 10,000 tonnes for kerosene. The high prices of petroleum and electricity have been major drivers of inflation, with petrol directly affecting the budgets of the middle- and lower-middle classes, as it is widely used in private transport, small vehicles, rickshaws, and two-wheelers.
PRIME MINISTER ANNOUNCES MAJOR ELECTRICITY TARIFF
Prime Minister Shehbaz Sharif announced a significant reduction in electricity tariffs for the industrial sector on Friday, as reported by state-run Radio Pakistan. The electricity price has been lowered by Rs10.69 per unit under the Prime Minister’s historic power package aimed at bolstering the country’s industry.
