The government on Wednesday slashed the prices of petrol and high-speed diesel (HSD) for the next fortnight by Rs15.39 and Rs7.88, respectively.

In a notification, the finance ministry said the reduction was due to price variations in the international market since prices of petroleum products had seen a “decreasing trend” in the last 15 days.

It said the new petrol price was Rs273.1 per litre and that of HSD was Rs274.08.

Informed sources had previously told Dawn that the prices of petrol and HSD had declined in the international market by about $8.7 and $4.3 per barrel, respectively, in the last fortnight.

The import premium on petrol increased by more than seven per cent in the last fortnight to $10.30 per barrel. Earlier, it had dropped in two phases to $9.60 per barrel before April 30 from $13.50 per barrel in March.

The HSD price also dropped by about $4.3 per barrel in the international market, and its import premium paid by the benchmark Pakistan State Oil remained unchanged at $6.50 per barrel.

The government has already achieved the Rs60 per litre petroleum development levy (PDL) — the maximum permissible limit under the law — on petrol and HSD and collected Rs720 billion in the first nine months ending March 31. Under the International Monetary Fund commitments, the government had set a budget target to collect Rs869bn as petroleum levy during the current fiscal year.

High petroleum and electricity prices have been the key reason for unprecedented inflation. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers and has a direct bearing on the budget of the middle- and lower-middle class.

Meanwhile, the government charges about Rs82 per litre tax on petrol and HSD. Although the general sales tax is zero on all petroleum products, the government charges Rs60 per litre PDL on both products.

On the other hand, it is charging Rs50 per litre and high octane blending component and 95RON petrol. The government is also charging about Rs19-20 per litre customs duty on petrol and HSD.

Petrol and HSD are the major revenue spinners, with their monthly sales of about 700,000–800,000 tonnes compared to just 10,000 tonnes of monthly demand for kerosene.