Govt cuts petrol, diesel prices by Rs1.97 per litre

ISLAMABAD: The government on Friday reduced the prices of petrol and high-speed diesel (HSD) by Rs1.97 per litre each for the week ending July 10, passing on part of the benefit of lower international oil prices to consumers.

According to a notification, the ex-depot price of petrol has been reduced from Rs299.50 to Rs297.53 per litre, while the price of high-speed diesel has been lowered from Rs311.47 to Rs309.50 per litre with immediate effect.

The latest adjustment comes amid a decline in global petroleum prices over the past week, although consumers received only a partial benefit as the government simultaneously increased the petroleum levy on both products.

Officials said that without the increase in the levy, petrol prices could have fallen by around Rs11 per litre, while diesel prices were estimated to decline by nearly Rs4 per litre.

High-speed diesel, widely used in freight transport, agriculture and heavy industries, is considered the most inflation-sensitive petroleum product due to its impact on transportation and commodity prices.

Diesel prices have now declined significantly from their peak of Rs520.35 per litre recorded on April 3 after surging during the US-Iran conflict. The upward trend had begun when diesel was priced at around Rs281 per litre in early March.

Similarly, petrol prices have fallen sharply from their record high of Rs458.41 per litre reached on April 3. Since then, successive price revisions have reduced petrol prices by approximately Rs109 per litre.

Under commitments made as part of the International Monetary Fund (IMF) programme, the government doubled the Climate Support Levy from July 1 to Rs5 per litre while correspondingly adjusting the petroleum levy.

The petroleum levy on high-speed diesel currently stands at around Rs80 per litre, while petrol carries a petroleum levy of about Rs70 per litre in addition to the Rs5 per litre climate support levy.

The government is also charging approximately Rs101 per litre on high-speed diesel through petroleum levy, customs duty, climate levy and the Inland Freight Equalisation Margin (IFEM).

Similarly, total government charges on petrol amount to around Rs95 per litre, including customs duty, petroleum levy and the climate support levy.

In addition, the government is collecting around Rs21 per litre as petroleum levy on kerosene and about Rs16 per litre on light diesel oil.

Petrol and high-speed diesel remain the country's principal petroleum products, with combined monthly sales ranging between 700,000 and 800,000 tonnes, making them major contributors to government revenue.