Govt slashes petrol price by Rs2.04, HSD by Rs6.47

ISLAMABAD: The federal government on Wednesday reduced the prices of petrol and high-speed diesel (HSD) by Rs2.04 and Rs6.47 per litre, respectively, for the next fortnight.

According to a notification from the Ministry of Finance, the new prices of petrol and HSD are Rs281.34 and Rs296.71.

Meanwhile, the prices of kerosene oil and light-diesel oil were reduced by Rs6.05 and Rs9.01 per litre, respectively, to Rs204.98 and Rs180.45.

Informed officials had earlier predicted that the prices of petrol and HSD would decline by Rs8 to Rs10 per litre each, mainly due to lower prices in the international market.

The officials had said that the international prices of both HSD and petrol had fallen over the past two weeks. However, the rupee had depreciated against the dollar during the same period, reducing the benefit of lower international prices for consumers.

For price calculations, officials said that HSD had become about $9 per barrel cheaper on average, down from about $113 to $104, during the week, while the price of petrol had dropped by a dollar from $91 to $90. The rupee, on the other hand, lost Rs6 in value against the dollar, declining from Rs280 to Rs286.

The government has already reached the maximum permissible limit of Rs60 per litre in petroleum development levy (PDL), as stipulated by the law. The government’s budget target is to collect Rs869 billion as PDL on petroleum products for the current fiscal year, in accordance with commitments to the International Monetary Fund (IMF).

Despite a gradual increase in per litre rates on petrol and almost unchanged rates at Rs50 per litre for petrol in the first quarter of the fiscal year, the total PDL collection had exceeded Rs222bn in the first quarter ending September 30, 2023.

On October 31, the government had kept the petrol and HSD prices unchanged. Earlier, between August 15 and Sept 15, petrol and HSD prices had surged by Rs58.43 and Rs55.83 per litre, respectively, reaching a historic Rs331 to Rs333 per litre at the retail stage until Sept 30. Subse­quently, rates for petrol and diesel were reduced by Rs52 and Rs26 per litre, respectively, in two cuts with effect from Oct 1 and 16.

Presently, the government is charging about Rs80 per litre tax on both petrol and HSD. Despite a zero general sales tax on all petroleum products, the government levies Rs60 per litre as PDL on both products.