ISLAMABAD: The government on Friday cut the price of both petrol and diesel by Rs1.97 per litre, with immediate effect for the week ending July 10, to pass on part of the impact of lower global prices over the past week.

As such, the ex-depot price of high-speed diesel (HSD) was set at Rs309.50 for the next week instead of Rs311.47 at present, down Rs1.97.

The diesel price has come down from a peak of Rs520.35 recorded on April 3. Its price had started rising from Rs281 per litre after the US-Iran war broke out on February 28. HSD is considered the most inflationary fuel given its widespread use in freight transportation.

The ex-depot rate of petrol was set at Rs297.53 per litre for the next week against Rs299.50 at present, showing a decrease of Rs1.97. The petrol price had peaked at Rs458.41 on April 3 after beginning its upward trajectory from Rs266 in the first week of March.

The petrol price has undergone successive downward revisions, with a cumulative reduction of about Rs109 per litre.

The government slightly increased the petroleum levy on both products; otherwise, petrol and diesel prices would have dropped by about Rs11 and Rs4 per litre, respectively.

Under IMF conditions, the government doubled the climate support levy to Rs5 per litre with effect from July 1, while correspondingly reducing the petroleum levy. As a result, the petroleum levy on diesel currently stands at about Rs80 per litre.

On the other hand, the petroleum levy on petrol now stands at about Rs70 per litre, in addition to the Rs5 climate support levy.

The government is currently charging about Rs101 per litre on high-speed diesel (HSD) in the form of Rs16 per litre customs duty, in addition to the petroleum levy and climate support levy, as well as the inland freight equalisation margin.

Meanwhile, the total tax on petrol amounts to Rs95 per litre, including Rs20 per litre customs duty in addition to the petroleum levy and climate levy.

The government is also charging about Rs21 per litre as petroleum levy on kerosene and about Rs16 per litre on light diesel oil.

Petrol and high-speed diesel (HSD) are the major revenue earners, with monthly sales of about 700,000 to 800,000 tonnes, compared to just 10,000 tonnes of monthly demand for kerosene.