Petrol price slashed by Rs8 per litre

Price of high-speed diesel remains unchanged

ISLAMABAD:

The caretaker federal government has announced a significant reduction in the price of petrol by Rs8 per litre, effective from today (Tuesday). The new price of petrol is now Rs259.34 per litre, down from the previous Rs267.34.

In contrast, the price of high-speed diesel (HSD) has been maintained at Rs276.21 per litre. The decision to keep diesel prices unchanged is attributed to an adjustment in the exchange rate at Rs1.50 and a premium of $5.30 per barrel.

The Finance Ministry, in a statement, underscored that these revisions align with the recommendations of the fuel regulator, the Oil and Gas Regulatory Authority (OGRA).

The decision-making process considered various factors, including the petroleum levy (PL), general sales tax (GST), premium, exchange rate, and global oil prices.

The reduction in petrol prices is expected to lead to increased consumption, especially amid the ongoing gas crisis in the country. Petrol serves as an alternative to compressed natural gas (CNG) in vehicles, and the current situation may result in a surge in its usage.

Conversely, the unchanged price of diesel, crucial in the transport and agriculture sectors, may have implications for inflation.

Government of Pakistan has reduced Petrol price by 8 rupees, whereas price of High Speed Diesel has been maintained. pic.twitter.com/wIhfAVBW5t

— Ministry of Finance, Government of Pakistan (@Financegovpk) January 15, 2024

Read also: Petroleum prices likely to go down

The announcement does not include revisions for kerosene oil or light diesel oil (LDO), which were anticipated to see a decrease of Rs3 and Rs1.50 per litre, respectively.

Kerosene oil is widely used in stoves in remote areas where liquefied petroleum gas (LPG) is not readily available, while LDO is an essential component in industries.

The decision-making process also took into account global oil market dynamics, with Brent Oil prices decreasing by $1.5 per barrel from $84.50 to $83 since January 1, 2024.

Additionally, the HSD rate experienced a modest reduction of approximately $1 per barrel, falling from $97 to $95.80. It is noteworthy that during this period, the Pakistani rupee has gained ground against the US dollar by Rs3.