The government on Monday announced a decrease in petroleum prices for the month of January, slashing the rates of petrol and diesel by Rs4.86 and Rs4.26 per litre, respectively.

The price of kerosene oil has been reduced by Rs0.52 and that of light diesel oil (LDO) by Rs2.16 per litre, a finance ministry statement said.

The new price of petrol will be Rs90.97, while that of high speed diesel (HSD) – used in trucks and buses etc — will be Rs106.68 per litre.

Kersone oil and LDO will be sold at Rs82.98 and Rs75.28 per litre, respectively.

The new prices will take effect from midnight, Radio Pakistan reported.

The Oil and Gas Regulatory Authority (Ogra) had recommended a reduction in petroleum prices by up to 13.5 per cent, keeping in line with the declining global trend in oil markets.

The regulatory authority had suggested that prices of petrol be reduced by Rs9.50 per litre (10pc) to Rs86.33, kerosene oil by Rs0.25 to Rs83.25 and LDO by Rs2 to Rs7.44 per litre for January 2019.

For HSD, a decrease of Rs15 per litre (13.5pc) had been recommended, which would take the new rate to Rs95.94 from existing Rs110.94 per litre.

The recommendations of the regulator were based on a drop in crude oil prices and petroleum fuel in the international markets.

International crude prices reached a high in early October but then dropped to an 18-month low in November. Experts in oil marketing said that higher US supplies coupled with record production from Saudi Arabia and Russia, would flood the market while the global economic slowdown would cut into demand.

While global prices had decreased in November too, its impact was not passed on to the consumers as the Federal Board of Revenue (FBR), on the directions of the finance ministry, had raised sales tax on diesel from 12pc to 13pc, and from 4.5pc to 8pc for petrol for December.

The Organisation of Petroleum Exporting Countries had agreed on December 7 to cut 1.2 million barrels per day from the October levels. Members would cut 800,000 bpd and allies 400,000 bpd, which would continue for six months, with the target to return prices to $70 a barrel by mid of 2019.