On Wednesday, the federal government announced a reduction in the prices of petrol and high-speed diesel (HSD) by Rs2.04 and Rs6.47 per litre, respectively, for the upcoming two weeks. As per a notification from the Ministry of Finance, the revised prices for petrol and HSD stand at Rs281.34 and Rs296.71.
Simultaneously, the prices of kerosene oil and light-diesel oil were lowered by Rs6.05 and Rs9.01 per litre, respectively, settling at Rs204.98 and Rs180.45. Earlier predictions from informed officials had anticipated a more substantial decline in petrol and HSD prices, ranging from Rs8 to Rs10 per litre each, primarily attributed to the reduced international market rates.
These officials highlighted a recent dip in international prices for both HSD and petrol over the preceding two weeks. However, the depreciation of the rupee against the dollar during the same period tempered the advantages of the lowered international prices for consumers.
For price computations, officials noted that HSD had become approximately $9 per barrel cheaper on average, decreasing from about $113 to $104, during the week. Meanwhile, the price of petrol had decreased by a dollar from $91 to $90. However, the rupee experienced a devaluation of Rs6 against the dollar, dropping from Rs280 to Rs286.
It’s noteworthy that the government has already reached the maximum permissible limit of Rs60 per litre in petroleum development levy (PDL), as mandated by the law. The government aims to collect Rs869 billion as PDL on petroleum products for the current fiscal year, aligning with commitments to the International Monetary Fund (IMF). Despite a gradual increase in per-litre rates on petrol and nearly unchanged rates at Rs50 per litre for petrol in the first quarter of the fiscal year, the total PDL collection exceeded Rs222 billion in the initial quarter ending on September 30, 2023.
On October 31, the government maintained the petrol and HSD prices unchanged. Notably, between August 15 and September 15, petrol and HSD prices experienced a surge of Rs58.43 and Rs55.83 per litre, respectively, reaching a historic Rs331 to Rs333 per litre at the retail stage until September 30. Subsequently, rates for petrol and diesel were reduced by Rs52 and Rs26 per litre, respectively, in two cuts with effect from October 1 and 16.
At present, the government imposes approximately Rs80 per litre tax on both petrol and HSD. Despite a zero general sales tax on all petroleum products, the government levies Rs60 per litre as PDL on both products.