Prime Minister Shehbaz Sharif on Tuesday approved a slash in the petrol price by Rs8.47 per litre and Rs6.7 for high-speed diesel (HSD), respectively, for the next fortnight in a “big gift” for the people on the eve of Independence Day.

A statement issued by state broadcaster PTV termed it a “great decrease” in the prices of the petroleum products, saying the petrol price was now Rs260.96 and Rs266.07 that of HSD.

The statement did not mention any changes in the prices of light diesel oil and kerosene oil.

The prices of petrol and HSD were previously estimated to drop by up to Rs9.2 per litre for the next fortnight, mainly because of the lower international prices.

Informed sources had said the prices of petrol and HSD had decreased in the international market by more than $3 per barrel in the last fortnight.

Officials had said the average international petrol price had dropped to $84 per barrel. HSD also declined to about $91 in the last fortnight. During the current fortnight, the import premium on both petrol and HSD generally remained unchanged at about $9 and $5 per barrel, respectively. On the other hand, the local currency lost slightly to the US dollar during the fortnight.

The ex-depot petrol price currently stands at Rs269.43 per litre, and that of HSD at Rs272.77 per litre. On the last fortnightly review on July 31, the government cut the petrol and HSD prices by about Rs6.17 and Rs10.86 per litre after an increase of Rs17.44 and Rs15.74 per litre, respectively, in July. Earlier, between May 1 and June 15, the prices of both petrol and HSD had reduced by about Rs35 and Rs22 per litre, respectively.

The government has jacked up the maximum limit of petroleum levy to Rs70 per litre in the finance bill to collect Rs1.28 trillion in the next fiscal year against Rs1.019tr collection during the last fiscal year, almost Rs150 billion higher than the Rs869bn budget target.

Currently, the government is charging about Rs78 per litre tax on petrol and HSD. Although the general sales tax is zero on all petroleum products, the government charges Rs60 per litre petroleum development levy on both products that normally impact the masses. The government is also charging about Rs18 per litre custom duty on petrol and HSD, irrespective of their local production or imports. In addition, about Rs17 per litre distribution and sale margins are going to oil companies and their dealers.