Govt slashes petrol price by Rs5.16 per litre, high-speed diesel rate by Rs7.69

On Monday, the government announced a significant reduction in the prices of petrol and high-speed diesel. The petrol price dropped by Rs5.16 per litre, while high-speed diesel saw a decrease of Rs7.69 per litre. Consequently, the retail price for petrol now stands at Rs381.14 per litre, and for high-speed diesel, it is Rs389.27 per litre. Despite the price reduction, the government continues to impose taxes and duties, with Rs114 per litre on petrol and Rs100 per litre on diesel.

The new fuel prices come into effect from October 20 (Tuesday). The decrease in high-speed diesel price marks its return to its previous level, which was recorded at Rs520.35 per litre on April 3. High-speed diesel prices had begun to rise from Rs281 per litre following the outbreak of the US-Iran war on February 28. Conversely, petrol prices peaked at Rs458.41 per litre on April 3, after starting to climb from Rs266 in the first week of March.

In response to the escalating fuel prices resulting from the ongoing Middle East conflict, the government has reintroduced various austerity measures. Markets have been mandated to close by 9 pm, and fuel allocations for official vehicles have been reduced by 50% for three months. Prime Minister Shehbaz Sharif also introduced a relief scheme for users of motorcycles, autos, and vehicles up to 800cc to alleviate the burden of increasing global oil prices.

Petroleum Minister Ali Pervaiz Malik had previously announced that fuel prices would be determined daily due to fluctuations in international market prices following the renewed hostilities between Iran and the US. Prior to this change, the government had been announcing weekly revisions to fuel prices since early March. Earlier this year, the federal government also announced targeted relief measures to provide subsidized fuel to the public.

The Petroleum Minister stated that the cabinet and the prime minister had decided to entrust the Oil and Gas Regulatory Authority (Ogra) with the responsibility of deciding fuel prices on a daily basis based on international market trends. Petrol, primarily used in private transport, small vehicles, rickshaws, and two-wheelers, has a significant impact on the middle and lower-middle classes.

In contrast, high-speed diesel, widely used in the heavy transport sector, power plants, and large generators, affects the general public. Together, petrol and high-speed diesel are the major revenue earners, with monthly sales of around 700,000 to 800,000 tonnes, compared to only 10,000 tonnes of monthly demand for kerosene.