The federal government slashed on Sunday the petrol price by Rs10 per litre and diesel rate by Rs13.6 per litre, respectively as part of its fortnightly revision. The light diesel price was decreased by Rs12.12.

The new rates will come into effect at midnight. The prices would remain in place for the next fortnight starting from September 16, according to the notification.

The new petrol price is Rs259.10 and the new high-speed diesel rate is Rs249.69, with the price of kerosene falling by Rs11.15 from Rs169.62 to Rs158.47. Light diesel oil has become Rs12.12 cheaper, with prices falling to Rs149.13 from Rs154.05.

There was a possibility of a notable decrease in petroleum prices tonight, as the Oil and Gas Regulatory Authority (Ogra) has submitted a summary to the prime minister recommending a price cut.

From September 1 to September 14, international crude oil prices dropped by Rs8 to Rs12. The price of crude oil in the international market, which stood at $90 per barrel in April 2024, has now fallen to approximately $70 per barrel in September, marking the lowest price in the last six months.

In light of this decline, Ogra, in consultation with the petroleum ministry, had sent a summary to the finance ministry recommending a price reduction of Rs6 to Rs10, based on the international price decrease.

Pakistan’s fuel rates are determined by a pricing formula approved by the government.

In the fiscal year budget, the government increased the maximum petroleum levy from Rs60 to Rs70 per litre to collect Rs1.28 trillion. The target is nearly Rs150 billion higher than the previous year’s collection of Rs1.019 trillion and exceeds the budget target of Rs869 billion.

The government has imposed about Rs78 per litre tax on petrol and HSD.

Additionally, it levies around Rs8 per litre in customs duties on petrol and HSD, regardless of whether they are produced locally or imported. Oil companies and their dealers also receive approximately Rs17 per litre in distribution and sale margins.

The finance ministry is required to formalise a staff-level agreement with the IMF before the Executive Board meeting on September 25, amid stringent conditions imposed by the global lender.

Despite this, it was anticipated that instead of a significant reduction of Rs6 to Rs12 in petroleum prices late tonight, the government might only lower prices by Rs2 to Rs5 to present a higher revenue figure.

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The prices of petrol and diesel in the country stand at Rs259.10 and Rs262.75 per litre, respectively. The government had previously announced a minor price reduction for petroleum products on the night of August 31, valid until September 15.

Petroleum prices in the country have decreased Rs47.54 per litre since May, Petroleum Minister Musadik Malik said on Thursday.

“Pakistan purchases fuel at international market rate, however, we get some discount on its [premium],” he said during the National Assembly session.