ISLAMABAD: No less than any festivity for the inflation-hit masses, the caretaker government on Sunday slashed prices of petrol by Rs40 per litre and that of high-speed diesel (HSD) by Rs15 for the next fortnight.
According to a notification issued by the Ministry of Finance, the new price of petrol is Rs283.38 and Rs303.18 for HSD.
It said that the government has revised the consumer prices of petroleum products in the wake of variations in international prices of the commodity and improvement in the exchange rate.
The new prices will come into effect from 12am (tonight, October 16) and remain in place till October 31.
New prices of petroleum products for the fortnight starting from October 16 will be as follow:
In addition to this, the government also cut the prices of light diesel by Rs19.59 per litre and kerosene oil by Rs22.43 for the next fortnight. After the massive reduction in the prices of petroleum products, the rates of kerosene oil will drop to Rs214.85 per litre.
The interim government, led by Prime Minister Anwarul Haq Kakar, is charging zero general sales tax (GST) on all petroleum products while the rate of petroleum levy (PL) on petrol is Rs60 per litre.
In order to generate additional revenue to achieve the tax collection target for this fiscal year, the authorities, however, increased the levy on diesel by Rs5 to Rs55 per litre.
In the previous change, it had cut the price of petrol by Rs8 per litre and that of high-speed diesel by Rs11 per litre.
Between Aug 15 and Sept 15, petrol and high-speed diesel prices had risen by Rs58.43 and Rs55.83 per litre, respectively, to historic highs of Rs331-333 per litre at the retail stage.
Earlier this week, the prices of HSD and petrol were projected to fall below Rs300 per litre in the coming review due to a significant drop in global oil rates and the rupee’s appreciation.
The dollar lost another 93 paise on Thursday to close at Rs278.58 in the interbank market, which did not react to the disappointing figure of remittances.
However, there were also chances of the interim government deciding otherwise, particularly in the case of high-speed diesel, which presently carries the petroleum development levy of Rs50 per litre compared to Rs60 on petrol.
The government aims to charge about Rs869 billion in levy on petroleum products during the current fiscal year’s budget target and commitments made with the International Monetary Fund (IMF).
Petrol and diesel prices have stayed above Rs300 per litre since September 1. Along with costly electricity, fuel has been the key driver of high consumer prices, pushing inflation to 31.4 per cent in September. Against this backdrop, the reduction could halt the rising inflationary trend.
