Govt reduces petrol price by Rs2.27 per litre, high-speed diesel rate by Rs3.56

On Monday, the government announced a reduction in petrol prices by Rs2.27 per litre and high-speed diesel (HSD) prices by Rs3.56 per litre. As a result, the price of petrol will now be Rs389.03 per litre and HSD will cost Rs404.97 per litre. The government maintains a tax rate of Rs114 per litre on petrol and Rs100 per litre on diesel.

According to the Petroleum Division's notification, these new prices will be effective from September 29. The HSD price has dropped from a peak of Rs520.35, which was recorded on April 3. Prior to the price hike, it started increasing from Rs281 per litre after the US-Iran war began on February 28. The petrol price had reached its highest point of Rs458.41 on April 3, following a gradual rise from Rs266 in the first week of March.

In response to the soaring fuel prices caused by the ongoing Middle East conflict, the government has reintroduced austerity measures. These include limiting market operations to end at 9pm and reducing fuel allocations for official vehicles by 50% for three months. On September 13, Prime Minister Shehbaz Sharif announced a "relief scheme" for motorcycle, auto, and 800cc vehicle users to alleviate the burden of escalating global oil prices.

On July 17, Petroleum Minister Ali Pervaiz Malik revealed that fuel prices would now be determined on a daily basis due to market fluctuations following renewed tensions between Iran and the US. Before this, fuel prices were revised weekly since early March, along with fuel conservation measures to counter possible oil supply disruptions due to the Middle East conflict.

The federal government also announced targeted relief measures in April to subsidize fuel. The prime minister appointed the Oil and Gas Regulatory Authority (Ogra) to decide fuel prices daily based on international market trends. Petrol is primarily used in private transport, small vehicles, rickshaws, and two-wheelers, with its price changes affecting the middle and lower-middle classes.

Diesel influences the entire public, as it is widely used in the heavy transport sector, power plants, and large generators. Petrol and HSD generate significant revenue, with monthly sales of about 700,000 to 800,000 tonnes, compared to just 10,000 tonnes for kerosene.