The federal government on Wednesday slashed the prices of petrol and high-speed diesel (HSD) by Rs2 per litre for the next fortnight.

The new prices are Rs252.63 for petrol and Rs256.64 for HSD, according to a press release from the Finance Division.

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

The decision comes after the government last time burnt the midnight oil to block about a Rs10 per litre reduction in major petroleum products — petrol and diesel — by amending the Petroleum Products (Petroleum Levy) Ordinance 1961.

Government officials had aid the government was already charging the maximum permissible petroleum levy on petrol, HS) and high-octane blending component (HOBC) at Rs70 per litre, which is why a new law was required to keep the prices unchanged at the existing level.

This was done through an amendment to the petroleum levy law and an increase in the levy to Rs80 per litre. The government had decided not to let the petroleum prices decline further, which could trigger increased demand, encourage carbon emissions and cost higher foreign exchange.

In the global market, petrol and HSD prices had dropped by about $6 and $5 per barrel, respectively. The prime minister announced that funds raised through the increase in levy would be spent on road construction in Sindh and Balochistan, apparently to ensure political support from coalition partners.