August 1, 2024
ISLAMABAD – Prime Minister Shehbaz Sharif on Wednesday approved a cut in the prices of petrol by Rs6.17 per litre and high-speed diesel (HSD) by Rs10.86, respectively, for the next fortnight.
State broadcaster PTV posted a statement on X saying that the new petrol price was now Rs269.43 and that of HSD was Rs272.77.
It added that the price of kerosene oil was also reduced to Rs177.39 by a Rs6.32 cut while light diesel oil was now Rs160.53 after a Rs5.72 cut.
Instead of a notification from the Finance Division, PTV posted the summary of the price changes for the prime minister’s approval.
The cuts in petrol and HSD prices are higher than previously estimated. After two consecutive increases, the prices were estimated to decline by about Rs3 and Rs8.50 per litre, respectively, from August 1 for the next fortnight, mainly because of lower international market and import premiums.
Informed sources had said the prices of these major products had decreased in the international market by about $2 and $3 per barrel, respectively, in the last fortnight.
Depending on the final calculation and existing tax rates, the price of petrol was projected to fall by Rs2.9 and that of HSD by Rs8.50 per litre.
Officials said the average price of petrol had dropped in the international market to $87.5 from $89.5 per barrel. HSD also declined to $94 from about $96.93 in the last fortnight.
During the current fortnight, the import premium on both products has also declined. It dropped to $8.8 from $9 on petrol and to $5 from $6.5 per barrel on HSD. On the other hand, the exchange rate movement remained range-bound during the fortnight.
The government has jacked up the maximum limit of petroleum levy to Rs70 per litre in the current Finance Bill to collect Rs1.28 trillion in the next fiscal year against Rs960 billion collected during the last fiscal year, almost Rs91bn higher than the Rs869bn budget target.
The petrol and HSD prices had increased by Rs7.45 and Rs9.56 per litre on June 30. This was followed by Rs9.99 and Rs6.18 per litre increase in prices of petrol and HSD, respectively, on July 16. As such, petrol and diesel rates cumulatively went up by Rs17.44 and Rs15.74 per litre, respectively during the current month.
Between May 1 and June 15, the prices of both products were reduced by about Rs35 and Rs22 per litre, respectively.
The government charges about Rs78 per litre tax on both petrol and HSD. Although GST is zero on all petroleum products, the government charges a Rs60 per litre petroleum development levy on both products which normally impacts the masses.