Govt reduces petrol price by Rs1.49 per litre, high-speed diesel rate by Rs2.73

The Pakistani government announced on Tuesday a reduction in the price of petrol by Rs1.49 per litre and high-speed diesel (HSD) by Rs2.73 per litre. Following the adjustment, petrol will cost Rs387.54 per litre, while HSD will be priced at Rs402.24 per litre. The government maintains a tax of Rs114 per litre on petrol and Rs100 per litre on diesel.

According to the Petroleum Division's notification, these new prices will take effect from September 30 (Wednesday). The HSD price has dropped from its April 3 peak of Rs520.35, having started to increase from Rs281 per litre after the start of the US-Iran conflict on February 28. The petrol price peaked at Rs458.41 on April 3, after beginning its upward trend from Rs266 in the first week of March.

In response to the rising fuel prices due to the Middle East conflict, the government has implemented several austerity measures. Markets are now required to close by 9pm, and fuel allocations for official vehicles have been reduced by 50 percent for three months. On September 13, Prime Minister Shehbaz Sharif introduced a "relief scheme" for users of motorcycles, autos, and light vehicles to alleviate the burden of increasing global oil prices.

Deputy Prime Minister and Foreign Minister Ishaq Dar praised the scheme's success, highlighting a "whole of government" approach. During a meeting of the National Steering Committee on Fuel Subsidy, Dar mentioned that the Ministry of Information and Technology, the Ministry of Petroleum, Ogra, the State Bank of Pakistan, and all provinces have made "concerted efforts" for the scheme.

So far, around 7.60 million registrations have been successfully made, and the redemption process for tokens has entered its second week, with 7.71 million tokens already redeemed. Fuel prices were previously announced on a weekly basis, but since Iran and the US renewed their conflict, the government began fixing prices daily. Prior to this, the government had been announcing weekly adjustments to fuel prices since early March, along with fuel conservation measures amid potential oil supply disruptions due to the conflict in the Middle East.

In April, the federal government also announced targeted relief measures to provide subsidized fuel. The Ogra was tasked with deciding fuel prices daily based on international market trends. Petrol is primarily used in private transport, small vehicles, rickshaws, and two-wheelers, and price fluctuations affect the middle and lower-middle classes.

Diesel price changes also impact the general public, as it is mainly used in heavy transport, power plants, and large generators. Petrol and HSD are the primary revenue sources, with monthly sales of 700,000 to 800,000 tonnes, compared to only 10,000 tonnes of monthly demand for kerosene.