ISLAMABAD: On Wednesday, the federal government announced a reduction in petrol and high-speed diesel (HSD) prices by Rs2.04 and Rs6.47 per litre for the next two weeks. The Ministry of Finance’s notification revealed the new prices to be Rs281.34 for petrol and Rs296.71 for HSD.
Simultaneously, kerosene oil and light-diesel oil prices were decreased by Rs6.05 and Rs9.01 per litre, bringing them to Rs204.98 and Rs180.45, respectively.
Earlier predictions by officials hinted at a larger decline of Rs8 to Rs10 per litre for both petrol and HSD, driven by lower international market prices. Despite the drop in global prices over the past two weeks, the impact on consumers was mitigated by the rupee’s depreciation against the dollar during the same period.
Officials elaborated that HSD became approximately $9 per barrel cheaper on average, decreasing from about $113 to $104, while petrol’s price dropped by a dollar from $91 to $90. However, the rupee lost Rs6 in value against the dollar, falling from Rs280 to Rs286.
The government has already reached the maximum permissible limit of Rs60 per litre in petroleum development levy (PDL), as mandated by law. The budget target is to collect Rs869 billion as PDL on petroleum products for the current fiscal year, aligning with commitments to the International Monetary Fund (IMF). Despite an increase in per litre rates on petrol and nearly unchanged rates at Rs50 per litre for petrol in the first quarter of the fiscal year, the total PDL collection exceeded Rs222 billion in the first quarter ending September 30, 2023.
On October 31, the government maintained unchanged petrol and HSD prices. Previously, between August 15 and September 15, petrol and HSD prices had surged, reaching a historic Rs331 to Rs333 per litre at the retail stage until September 30. Subsequently, rates for petrol and diesel were reduced by Rs52 and Rs26 per litre, respectively, in two cuts with effect from October 1 and 16.
Currently, the government imposes approximately Rs80 per litre tax on both petrol and HSD. Despite a zero general sales tax on all petroleum products, Rs60 per litre is levied as PDL on both products.
