The Government of Pakistan cut the petrol price by Rs2.07 per litre and high-speed diesel by Rs3.4/ltr on Monday, as the finance ministry announced new rates as part of the fortnightly revision.

The new prices of petrol and HSD after the reduction are Rs247.3 and Rs246.29, respectively.

The government has reduced the price of light diesel by Rs1.3 per litre, bringing the new price to Rs140.9. The kerosene oil price has also been decreased by Rs3.57 per litre.

It is noteworthy that despite stringent conditions set by the International Monetary Fund, the government announced a significant reduction in petroleum prices on September 15. The decision came after a major decline in global crude oil prices, although there was a recent increase of $2.50 per barrel, pushing the price back up to $72 per barrel.

In September, the government had previously reduced petrol prices by Rs10 per litre due to a drop of Rs7 in oil prices.

This adjustment in prices reflects ongoing efforts to manage the cost of essential commodities for consumers. The new rates are expected to take effect immediately, providing some relief to the public amid rising living costs.

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.

Petroleum prices in the country have decreased Rs47.54 per litre since May, Petroleum Minister Musadik Malik said on September 12.

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