Prime Minister Shehbaz Sharif has approved a cut in the price of diesel by Rs10.86 per litre, effective from August 1, 2024, in line with the decrease in global oil prices.
The price of petrol has been reduced by Rs6.17 per litre, kerosene oil by Rs6.32 per litre, and light diesel oil (LDO) by Rs5.72 per litre.
The Oil & Gas Regulatory Authority (Ogra) worked out the consumer prices of petroleum products, based on fluctuations in the international market.
The prices of Motor Spirit and HSD for the next fortnight, starting from August 1, 2024, have been revised downwards, the finance ministry said in a statement.
The ministry said the price of HSD has been reduced to Rs272.77 per litre from Rs283.63, marking a decrease of Rs10.86 per litre.
Since HSD is used in the agriculture and transport sectors, reduction in its price is expected to have an inflationary impact on consumers.
The price of petrol has been reduced to Rs269.43 per litre from Rs275.60 per litre, registering a decrease of Rs6.17 per litre.
Petrol is used in motorbikes and cars. It is considered an alternative to CNG, particularly in Punjab, where CNG retail outlets operate on imported LNG.
The price of kerosene oil has been slashed to Rs177.39 per litre from Rs 183.71 per litre, registering a cut of Rs6.32 per litre.
Kerosene oil is primarily used for cooking in areas where liquefied petroleum gas (LPG) is unavailable. It is widely used in the northern regions of the country, with the Pakistan army being its major consumer.
The price of LDO has been reduced to Rs160.53 per litre from Rs166.25 per litre, marking a decrease of Rs5.72 per litre. LDO is used primarily in industry.
The government has been charging a petroleum levy of Rs60 per litre on both petrol and HSD.
Additionally, it is charging a petroleum levy of Rs0.05 per litre on kerosene oil. However, no petroleum levy is being charged on LDO.
The government had set an ambitious target for collecting petroleum levy from oil consumers during the current financial year. As a result, the petroleum levy rate may be increased further to enhance revenue collection.
The collection of sales tax on these products is zero. Revenue from sales tax goes to the provinces while the petroleum levy is directed into federal coffers.
Therefore, the federal government increased the petroleum levy rate to boost revenue while keeping the sales tax rate on petroleum products at zero.
Meanwhile, Ogra announced an increase of Rs2.28 per kilogramme in LPG prices for August 2024.
Effective from the start of the month, the price of LPG will rise to Rs236.66 per kg.
The adjustment will also impact domestic LPG cylinder prices, with an 11.8kg cylinder now costing Rs2,796.26, an increase of Rs26.90. Commercial cylinder prices will see a hike of Rs103, bringing the new rate to Rs10,760.
The price change reflects Ogra's recent notification, which outlines the updated LPG rates for August 2024. The new LPG price per kg is now Rs237, compared to Rs235 previously.
Consequently, the domestic cylinder will be sold at Rs2,797, up from Rs2,770, while the commercial cylinder will be available at Rs10,760, an increase from Rs10,656.
These price adjustments are part of Ogra's ongoing efforts to regulate the LPG market and ensure fair pricing for consumers.
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