The federal government on Sunday slashed the prices of petrol and high-speed diesel (HSD) by Rs2 and Rs4.79, respectively, for the next fortnight.

According to a notification from the Petroleum Division, the new HSD price is Rs279.65 per litre, while the new rate for petrol is Rs263.45. The prices will come into effect on December 1.

“The government has revised the prices of the petroleum products based on recommendations of Ogra (Oil and Gas Regulatory Authority),” a notification from the Petroleum Division stated.

Most of the transport sec­tor runs on HSD and its 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.

Petrol is primarily used in private transport, small vehicles, rickshaws, and two-wheelers, and directly impacts the budgets of the middle and lower-middle classes.

The government charges about Rs99 per litre on both petrol and diesel. Although the general sales tax (GST) is zero on all the petroleum products, the government charges Rs79.50 per litre on diesel and Rs80.52 per litre on petrol and high-octane products on account of the petrol levy and climate support levy.

It also charges about Rs17-18 per litre customs duty on petrol and HSD, irrespective of their local production or imports. In addition, about Rs17 per litre of distribution and sales margins are going to oil companies and their dealers. Petrol and HSD dominate consumption at 700,000 to 800,000 tonnes a month compared to about 10,000 tonnes for kerosene.

Petroleum levy collections reached Rs1.161 trillion in FY25 and are budgeted to rise about 27pc to Rs1.47tr in the current fiscal year.