Big drop in fuel rates a silver lining for inflation-hit masses
ISLAMABAD: For the second fortnight in a row, the Caretaker Prime Minister Anwaarul Haq Kakar’s government reduced petrol and high-speed diesel (HSD) prices for the next 16 days, ending Oct 31, as a result of decline in the international market and an appreciation in the rupee’s value.
The petrol price was cut by Rs40 per litre, and HSD lowered by Rs15 per litre. As a result, the ex-depot price of petrol fell to about Rs284 per litre. However, the government raised the petroleum levy on HSD by Rs5, reaching a historic high of Rs55 per litre, just below the Rs60 maximum permissible limit under the law.
The government has to collect about Rs869bn as petroleum levy on petroleum products during the current fiscal year under the budget target and commitments made with the International Monetary Fund (IMF).
The Ministry of Finance announced the price decrease late at night following clearance from the caretaker prime minister.
Petrol price lowered by Rs40; diesel falls by Rs15; kerosene oil down by Rs22 per litre
“Owing to the decreasing trend of petroleum price in the international market and due to appreciation of the Pak rupee against the US dollar, the government has decided to revise the consumer prices of petroleum products,” it said.
The decision fixed the ex-depot price of petrol at Rs283.38 per litre for the next fortnight, a reduction of Rs40 per litre or 12.4pc. Petrol is commonly used in private transport, small vehicles, rickshaws, and two-wheelers, significantly impacting the budgets of the middle- and lower-middle class.
Similarly, the ex-depot price of HSD was set at Rs303.18 per litre from Rs318.18 per litre, marking a decrease of Rs15 per litre or 4.7pc. However, the retail price at the pump will likely exceed Rs304 per litre.
HSD is a primary fuel for the transport sector, including heavy vehicles, trains, and various agricultural engines such as trucks, buses, tractors, tube wells, and threshers. Its price has a notable inflationary effect, particularly on the prices of vegetables and other food items.
The ex-depot price of kerosene oil was set at Rs215.28 per litre instead of Rs237.28 per litre, reflecting a reduction of Rs22 per litre. The ex-depot rate for light diesel oil (LDO) was fixed at Rs193.45 per litre instead of Rs212.45. Kerosene is commonly used for mixing with petrol by unscrupulous individuals and, to some extent, for lighting in remote areas, while LDO is consumed by flour mills and a couple of power plants.
Between August 15 and September 15, the petrol and high speed diesel prices had increased by Rs58.43 and Rs55.83 per litre, respectively to a historic Rs331-333 per litre at retail stage until Sept 30.
Published in Dawn, October 16th, 2023