Petrol price dropped by Rs7.06 per litre, high-speed diesel by Rs3.71

The government reduced the price of petrol by Rs7.06 per litre and high-speed diesel (HSD) by Rs3.71 per litre on Wednesday. This brings the retail price of petrol to Rs362.00 per litre and HSD to Rs387.81 per litre, according to a notification by the Oil and Gas Regulatory Authority (Ogra). The price cuts come after international oil prices fell under $100 per barrel amid volatile trade, as investors awaited the next move by the US in the US-Israeli conflict with Iran following a change in Congress control.

Brent futures fell by $4.50, or 4.3%, to $99.07 a barrel, while US West Texas Intermediate crude futures dropped by $4.13, or 4.3%, to $92.02. The government still imposes a tax of Rs114 per litre on petrol and Rs100 per litre on diesel. For 30 days starting September 4, oil refineries will shoulder a cumulative Rs15 billion of the petroleum levy, which contributed to the Rs14.71 reduction in petrol prices for consumers.

Petroleum Minister Ali Pervaiz Malik mentioned the possibility of similar measures for LPG and hinted at more price cuts. The price of HSD has decreased from its April peak of Rs520.35, which started rising from Rs281 per litre after the US-Iran war began on February 28. Petrol's peak price of Rs458.41 was on April 3, after starting its upward trend from Rs266 in early March.

The government has also implemented austerity measures, including market closures by 9pm and a 50% cut in fuel allocations for official vehicles for three months. The Prime Minister announced a relief scheme for small vehicles, and fuel prices are now set daily due to international market fluctuations. In April, the government announced targeted relief measures for subsidized fuel, with Ogra responsible for daily price decisions based on market trends.

Petrol and HSD are the primary revenue earners, with monthly sales of about 700,000 to 800,000 tonnes, while kerosene's demand is just 10,000 tonnes.