ISLAMABAD: Federal government on Wednesday announced massive cut up to Rs 15.39 per litre in the ex-dept prices of petroleum products for the latter half of May starting from May 16.

After the approval from Prime Minister Shehbaz Sharif, petrol has been reduced by Rs 15.39 per litre, and high-speed diesel (HSD) decreased by Rs 7.88 per litre. At the same time, the price of Light Diesel Oil (LDO) has been reduced by Rs 7.54 per litre and kerosene oil witness a decrease of Rs 9.86 per litre.

Based on the current tax structure, consumers will now pay Rs 273.10 per litre for petrol, Rs 274.08 per litre for HSD, Rs 173.48 per litre for kerosene oil, and Rs 161.17 per litre for LDO. Earlier, petrol was available at Rs 288.49 per litre, HSD at Rs 281.96 per litre, Kerosene oil at Rs 183.34 per litre and LDO at Rs 170.66 per litre in Pakistan.

Significant decline in prices of petrol, HSD likely

Finance Division stated that the new prices has been announced in line with reduction oil prices globally and recommended by Oil and Gas Regulatory Authority (OGRA).

The reduction in prices for the second half of May 2024 has also been calculated with a slight improvement in rupee dollar parity to Rs 278.47152 per litre from Rs 278.63100 per litre, while the premium on petrol is $10.30/bbl (a barrel of crude oil), HSD premium $6.50/bbl (no change) in last two-week, sources said.

This is back to back relief in the prices of petroleum products. From May 1, 2024, the authorities reduced the petrol price by Rs5.45 per litre to Rs288.49 per litre from Rs293.94 per litre. Similarly, the diesel (HSD) price was also reduced by Rs8.42 per litre to Rs281.96 from Rs290.38 per litre.

Petrol is primarily used as fuel for cars, motorcycles, and other vehicles. High-Speed Diesel is mainly used as fuel for heavy vehicles like trucks, buses, and industrial machinery. It is also used in generators and some agricultural equipment. Kerosene Oil is used for cooking and lighting in households without access to electricity. Light Diesel Oil is used in industrial boilers, furnaces, and certain types of engines. It’s commonly utilised in sectors like textiles, cement, and power generation.

The government currently charges a petroleum levy of Rs60 per litre on both petrol and HSD. It is projected to collect Rs936 billion in petroleum levy this fiscal year, exceeding the budgeted target of Rs869 billion. Petroleum products are exempted from general sale tax.

The government anticipates that lower fuel prices will increase sales and consumption of petroleum products, which dropped by four per cent month-on-month and six per cent year-on-year in April 2024 and reduce the inflation.

Copyright Business Recorder, 2024

Comments

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Tariq Qurashi May 16, 2024 03:37pm
This is good news. But how long before they put the price up again? One step forward and two steps back.
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