The federal government has made a noteworthy announcement of substantial cuts in the prices of petroleum products in an effort to pass on the benefits of declining international market prices to the general public.
As per a statement from the finance ministry, the price of petrol has been reduced by Rs12 per litre, diesel by Rs30 per litre, and kerosene oil by Rs12 per litre. The new prices will take effect from Tuesday and remain in place for the next two weeks.
The government has taken into account the downward trend in the international market and decided to reduce the existing prices of petroleum products to provide maximum relief to the people, stated the announcement.
According to the government’s notification, the price of petrol will now be Rs270 per litre, down from the previous Rs282 per litre. High-speed diesel (HSD) will be available at Rs258 per litre, a significant decrease from the previous rate of Rs288 per litre.
Petrol is widely used in motorcycles and cars, and it also serves as an alternative fuel to compressed natural gas (CNG). HSD is extensively utilized in the transportation and agriculture sectors, making this reduction particularly beneficial for the ongoing sowing season and agriculture as a whole.
Additionally, the price of kerosene oil has dropped from Rs176.07 to Rs164.07 per litre, with a reduction of Rs12 per litre. Light diesel oil (LDO) will be sold at Rs152.68 per litre, compared to the earlier price of Rs164.68 per litre.
Kerosene oil is primarily used for cooking purposes in remote areas, especially in the northern regions of Pakistan where liquefied petroleum gas (LPG) is not readily available. The Pakistan Army also relies on kerosene oil in the northern parts of the country. LDO finds its application in various industries.
Finance Minister Dar expressed hope that the reduction in petroleum product prices would have a positive impact on the prices of other commodities. He further urged transporters to lower their fares to alleviate the burden on the already struggling masses.
It is worth noting that the government is currently imposing the maximum petroleum levy (PL) of Rs50 per litre on petrol, high-speed diesel, and high-octane blending component (HOBC). This is the highest rate approved by the government in the budget.
Due to this, the government has limited leeway to adjust the reduction in petroleum product prices to generate additional revenue. The revenue generated through the petroleum levy goes to the federal government.
While there was an opportunity to increase the general sales tax rate on petroleum products, the revenue from sales tax goes to the provinces. Hence, the government opted to lower the prices of petroleum products given the current political situation.