In a much-needed relief for the public grappling with soaring inflation, the interim government slashed petrol price by Rs40 per liter, bringing the new price to Rs283.38, while high-speed diesel (HSD) price reduced by Rs15 per liter, making it Rs303.18 for the next two weeks.
The Ministry of Finance issued a notification explaining that these adjustments in consumer prices are a response to fluctuations in international commodity prices and a favorable exchange rate.
These new prices will remain in effect until October 31, providing temporary relief to consumers.
In addition to the petrol and diesel cuts, the government has also lowered the price of light diesel by Rs19.59 per liter and kerosene oil by Rs22.43 per liter for the same two-week period. Following these reductions, kerosene oil will be priced at Rs214.85 per liter.
Prime Minister Anwarul Haq Kakar’s interim government has decided not to impose general sales tax (GST) on any petroleum products. However, the petroleum levy (PL) on petrol remains at Rs60 per liter. In an effort to meet fiscal targets and generate additional revenue, the PL on diesel has been increased by Rs5 to Rs55 per liter.
This move comes after a previous reduction where petrol prices were cut by Rs8 per liter and high-speed diesel by Rs11 per liter. Between August 15 and September 15, both petrol and high-speed diesel prices had surged to historic highs, reaching Rs331-333 per liter at retail outlets.
Earlier in the week, there were expectations that HSD and petrol prices would drop below Rs300 per liter due to declining global oil prices and the strengthening of the rupee. The interbank market saw the dollar depreciate by another 93 paise, closing at Rs278.58, despite remittances figures falling short of expectations.
It’s worth noting that the interim government might revisit these changes, especially regarding high-speed diesel, which currently carries a petroleum development levy of Rs50 per liter compared to Rs60 on petrol. The government aims to generate approximately Rs869 billion in petroleum levy revenue during the current fiscal year, aligning with commitments to the International Monetary Fund (IMF).
Petrol and diesel prices have consistently remained above Rs300 per liter since September 1, contributing to high consumer prices and driving inflation to 31.4 percent in September. This price reduction could help alleviate the ongoing inflationary pressures.
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