ISLAMABAD: The government on Monday redu­ced the petrol price by Rs8 per litre and kept the rates of all other petroleum products unchanged for the next fortnight ending January 31.

In a late-night announ­c­e­ment, the finance ministry said the government had decided to reduce the petrol rate and maintain the price of high speed die­sel (HSD) as recommen­ded by the Oil & Gas Regu­latory Authority (Ogra).

According to a notification, the ex-depot price of petrol was cut by Rs8 (three per cent) to Rs259.34 per litre from Rs267.34. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers, and has a direct bearing on the budget of middle- and lower-middle classes.

The HSD price was kept unchanged at Rs276.21 per litre. HSD price is considered inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube-wells and threshers, and particularly adds to the prices of vegetables and other eatables.

For the purpose of price calculations, officials said the international price of petrol had come down by more than a dollar from $84.50 to $83 per barrel over the last two weeks, while HSD had become cheaper by about $1.10 per barrel, from about $97 to $95.85.

The rupee on the other hand also gained against the dollar to around Rs280.40 from about Rs283 in the last week of December. The premium paid by Pakistan State Oil (PSO) for securing product cargos remained unchanged for HSD, but dropped to $7.50 from $10.5 per barrel last month.

Therefore, the petrol price was reduced by Rs9 per litre.

The government did not announce the prices of kerosene and light diesel oil.

The government has already achieved Rs60 per litre petroleum levy — maximum permissible limit under the law — on both petrol and HSD. The government had set budget target to collect Rs869 billion as petroleum levy on petroleum products during the current fiscal year under the commitments made with the International Monetary Fund, but was not hoping the collection to go beyond Rs950bn by the end of June.

Petroleum and electricity prices have been the key drivers of high rate of inflation recorded at 29.7pc in December as measured by Consumer Price Index.

At present, the government is charging about Rs82 per litre tax on both petrol and HSD. Although, general sales tax is zero on all the petroleum products, the government is charging Rs60 per litre PDL on both products. On the other hand, it is charging Rs50 per litre on high octane blending component and 95RON petrol. The government is also charging about Rs21-22 per litre customs duty on petrol and HSD.

Published in Dawn, January 16th, 2024