ISLAMABAD: The caretaker government on Wednesday reduced the prices of all petroleum products by Rs2 to 9 per litre for the next fortnight ending November 30 owing to lower prices in the international market.

In a late-night an­­nouncement, the finance ministry said the government decided to revise the prices of petroleum products for the fortnight starting November 16, as recommended by the Oil and Gas Regulatory Authority (Ogra).

The price of petrol was cut by Rs2.04 per litre and that of high-speed diesel by Rs6.47 per litre. Like­wise, the prices of kerosene and light diesel were cut by Rs6.05 and Rs9.01 per litre, respectively.

As a consequence, the ex-depot price of high-speed diesel (HSD) fell below Rs300 per litre after more than two months. As such, the ex-depot price of HSD was set at Rs296.71 per litre instead of Rs303.18 at present, down by Rs6.47 per litre. The retail price at pumps would, however, be well around 298 per litre.

Most of the transport sector runs on HSD. Its price is considered highly inflationary as it is mostly used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube wells, and threshers and particularly adds to the prices of vegetables and other eatables.

Under the decision, the ex-depot price of petrol was fixed at Rs281.34 per litre instead of Rs283.38 per litre at present for the next fortnight, a reduction of Rs2.04.

The product is mostly used in private transport, small vehicles, rickshaws and two-wheelers and has a direct bearing on the budget of the middle- and lower-middle class.

Likewise, the ex-depot price of kerosene oil was set at Rs204.98 per litre for the next 15 days instead of Rs211.03 per litre, showing a reduction of Rs6.05 per litre. The ex-depot rate for light diesel oil was fixed at Rs180.45 per litre instead of Rs189.46 per litre, down by Rs9.01 per litre. Kerosene is mostly used by unscrupulous elements for mixing it with petrol and to some extent for lighting in very remote areas while LDO is consumed by flour mills and a couple of power plants.

The sources said the petrol price should have gone down by Rs11 per litre but clearance of a letter of credit for one cargo on November 14 changed the situation. As a normal practice, this should have become part of next fortnight’s pricing but was taken into calculation immediately.

For price calculations, the officials said the HSD had become cheaper by about $9 per barrel on average — from about $113 to $104 — during the fortnight while the price of petrol had come down by a dollar from $91 to $90. The rupee on the other hand lost its value by Rs6 against the dollar, from Rs280 to Rs286.

The government has already achieved Rs60 per litre petroleum levy — the maximum permissible limit under the law. The government has set a budget target to collect Rs869bn as petroleum levy on petroleum products during the current fiscal year under the commitments made with the International Monetary Fund (IMF). The total PL collection had already crossed Rs222bn in the first quarter ending September 30, 2023 even though its per litre rates had increased slowly over the period on petrol and kept almost unchanged at Rs50 per litre for petrol throughout the first quarter of the fiscal year.

Published in Dawn, November 16th, 2023