Petrol price cut by by Rs2; high-speed diesel price remains unchanged

On Friday, the government decreased the price of petrol by Rs2 per litre, bringing it down consecutively for the ninth time in a row while high-speed diesel remained at Rs360 per litre. The new retail price for petrol will be Rs330 per litre from Nov 14 to Nov 16, as per a notification from the Oil and Gas Regulatory Authority (Ogra).

The government still imposes taxes and duties of Rs114 per litre on petrol and Rs100 per litre on diesel. For 30 days, starting Nov 2, oil refineries will offset a portion of the petrol price reduction through a cumulative Rs15 billion contribution to the petroleum levy, according to the government. This measure accounts for a Rs14.71 reduction at the consumer level.

Earlier, on Sept 17, the Prime Minister's Fuel Relief Scheme was implemented nationwide to alleviate the public's financial strain due to rising fuel prices. The scheme benefits motorcycle owners, rickshaw drivers, and vehicles up to 800cc. The high-speed diesel price has fallen from its April 3 peak of Rs520.35. Prior to the US-Iran war on Feb 28, diesel prices began to rise, starting at Rs281 per litre.

In response to the escalating fuel prices due to the Middle East conflict, the government has reintroduced austerity measures. Markets will now close by 9pm, and fuel allocations for official vehicles have been reduced by 50pc for three months. Since July 17, fuel prices have been revised nearly daily due to international market fluctuations following renewed tensions between Iran and the US.

The petroleum minister revealed that the cabinet and prime minister decided to entrust Ogra with the responsibility of determining fuel prices daily based on market trends. Previously, fuel prices were revised weekly since early March, alongside conservation efforts amid potential oil supply disruptions due to the conflict. The federal government also announced targeted relief measures in April to subsidize fuel.

Fuel, particularly petrol, is crucial for private transport, small vehicles, rickshaws, and two-wheelers, affecting the middle and lower-middle classes. Diesel prices also significantly impact the public, as they are widely used in heavy transport, power plants, and large generators. Petrol and high-speed diesel are the primary revenue sources, with monthly sales ranging from 700,000 to 800,000 tonnes, while kerosene demand stands at 10,000 tonnes monthly.