December 16 Marks a Milestone as Pakistan Reduces Fuel Prices by up to Rs14
The government of Pakistan announced a significant reduction in the prices of all petroleum products, ranging from 4.6% to 6.4% (Rs10 to 14 per litre) for the next fortnight until December 31. This decision is attributed to the combination of lower international market prices and gains in the exchange rate.
As per the late-night announcement from the Ministry of Finance, the revision in petroleum product prices was made in line with the recommendations from the Oil and Gas Regulatory Authority.
According to the notification, the ex-depot price of petrol saw a reduction of Rs14 per litre (4.9%), now priced at Rs267.34 per litre compared to the previous rate of Rs281.34 per litre.
Similarly, the ex-depot price of high-speed diesel (HSD) experienced a decrease of Rs13.50 per litre (4.65%) to Rs276.21, down from Rs289.71.
The ex-depot kerosene price was lowered by Rs10.14 per litre (5%) to Rs191.02 per litre from the existing rate of Rs201.16. Additionally, the price of light diesel oil (LDO) was cut by Rs11.29 per litre (6.4%) to Rs164.64 per litre from Rs175.93 per litre.
Officials explained that the international prices of both HSD and petrol had declined by almost 5% over the past fortnight, coupled with a minor recovery of the rupee against the dollar. This led to a significant drop in domestic prices for consumers.
For price calculations, it was highlighted that HSD became cheaper by about $4 per barrel on average, dropping from about $99.50 to $95.50 during the week. The price of petrol had also come down by a dollar. The rupee gained against the dollar, reaching Rs284 on December 13 compared to about Rs285.5 on the first of December. The benchmark Brent oil during the period had dropped from $79 per barrel to $73.
The government has already achieved the maximum permissible limit of Rs60 per litre in petroleum levy on both petrol and HSD, as per the law. The budget target for collecting Rs869 billion as petroleum levy on petroleum products during the current fiscal year, in line with commitments to the International Monetary Fund (IMF), is not expected to exceed Rs950 billion by the end of June.
