The government announced on Friday a reduction in the prices of petrol and high-speed diesel (HSD) for the next fortnight by Rs10.2 and Rs2.33 per litre, respectively.
According to a notification from the finance ministry, the prices of petroleum products have shown a mixed trend in the international market over the past two weeks. The Oil and Gas Regulatory Authority (Ogra) calculated the new consumer prices based on these international market variations.
The new price of petrol is set at Rs258.16 per litre, while the price of HSD is Rs267.89 per litre.
New Petroleum Prices from 15th June, 2024. pic.twitter.com/j7u2uHNMZd
— Ministry of Finance, Government of Pakistan (@Financegovpk) June 14, 2024
The Prime Minister’s Office described the price reduction as a gift from the premier in anticipation of the upcoming Eidul Azha holiday.
Previously, sources indicated that the government planned to pass on the benefits of lower international prices to consumers. In the last two weeks, international prices of petrol and HSD fell by approximately $3.75 and $2.7 per barrel, respectively. This was in addition to previous drops of about $12 and $8 per barrel for petrol and HSD, respectively, over the preceding two fortnights.
Petrol prices have decreased to slightly over $90 per barrel from about $94 per barrel, while HSD prices have been reduced to $95 from $98 per barrel. The import premium on petrol has also slightly decreased in the last fortnight to $9.5 per barrel from $9.7. Meanwhile, the value of the rupee has remained stable.
The final price includes the Petroleum Development Levy (PDL), for which the government has reached the maximum permissible limit of Rs60 per litre under the law for both petrol and HSD. This has contributed Rs720 billion to the government’s revenue in the first nine months of the fiscal year ending March 31.
The government had set a budget target to collect Rs869 billion in PDL for the current fiscal year, under commitments made with the International Monetary Fund, which has now been revised to Rs960 billion.
Currently, the government is charging about Rs80 per litre in taxes on both petrol and HSD, including about Rs19-20 per litre in customs duty. This is despite the general sales tax being zero on all petroleum products.
Petrol and HSD are major revenue generators, with monthly sales of about 700,000 to 800,000 tonnes compared to just 10,000 tonnes of monthly demand for kerosene.
