Govt reduces petrol price by Rs1.65 per litre, HSD by Rs0.88 per litre

On Friday, the government announced a decrease in petrol prices by Rs1.65 per litre and high-speed diesel (HSD) prices by Rs0.88 per litre. Consequently, petrol will now sell for Rs389.14 per litre and HSD for Rs424.04 per litre. The government retains a tax of Rs114 per litre on petrol and Rs100 per litre on diesel. The updated prices will be in effect from September 19 (Saturday) to September 21 (Monday).

The Petroleum Division's notification attributes the change to rising international market prices for petrol and diesel. OGRA, the regulator, explained that the revisions were based on international market rates, premiums, and other pertinent factors. HSD's price has dropped from its April 3 peak of Rs520.35, having begun rising from Rs281 per litre after the US-Iran conflict commenced on February 28.

In March, petrol's price had peaked at Rs458.41 after beginning its upward trend from Rs266 in early March. To counteract rising fuel costs, the government has implemented a series of austerity measures, such as curfews at markets and a 50% reduction in fuel allocations for official vehicles for three months. On September 13, Prime Minister Shehbaz Sharif unveiled a "relief scheme" for motorcycles, autos, and vehicles up to 800cc, offering a monthly rebate of Rs100 per litre for the former and Rs100 per litre for the latter on a 20-litre and 30-litre quota, respectively.

On July 17, Petroleum Minister Ali Pervaiz Malik revealed that fuel prices would be determined daily due to international market price fluctuations following renewed tensions between Iran and the US. Prior to this, fuel prices had been adjusted weekly since early March, alongside fuel conservation measures in anticipation of potential supply disruptions due to the Middle East conflict.

In April, the federal government also announced targeted relief measures to subsidize fuel. The petroleum minister informed that the cabinet and prime minister had entrusted OGRA with the daily determination of fuel prices based on international market trends. Petrol is predominantly utilized in private transportation, small vehicles, rickshaws, and two-wheelers, and price fluctuations impact the middle and lower-middle classes.

Diesel price changes also affect the general public, as it is primarily used in heavy transportation, power plants, and large generators. Petrol and high-speed diesel (HSD) constitute the primary revenue sources, with monthly sales ranging from 700,000 to 800,000 tonnes, as opposed to the 10,000 tonnes monthly demand for kerosene.