The government on Saturday night announced an across the board decrease in the prices of petroleum products for December.
The decision was made keeping in view recommendations made by the Oil & Gas Regulatory Authority (Ogra) which had proposed the decrease to pass on the impact of lower international market rates.
According to a notification issued by the finance ministry, petrol will now cost Rs113.99 per litre which is Rs0.25 cheaper than last month's rate.
Light diesel oil and high speed diesel will see a significant reduction in prices this month, costing Rs2.90 and Rs2.40 cheaper. According to the new rate, light diesel oil will cost Rs82.43 and high speed diesel will cost Rs125.01.
Similarly, kerosene has become Rs0.83 cheaper, costing Rs96.35 this month.
Last month's hike in prices were attributed to the government seeking to generate an additional revenue of about Rs700 million.
The government had begun increasing petroleum levy rates over the past few months to partially offset a revenue shortfall of over Rs113 billion faced by the Federal Board of Revenue in the first quarter of the current fiscal year.
The levy remains in the federal kitty unlike the GST that goes to the divisible pool, of which about 57 per cent is grabbed by the provinces.
Petrol and HSD are the products that generate much of the revenue for the government due to their massive and yet growing consumption in the country. About 800,000 tonnes of HSD are sold every month in the country against a monthly consumption of around 700,000 tonnes of petrol. The sales of kerosene oil and LDO are generally less than 10,000 tonnes per month.