The Oil and Gas Regulatory Authority (OGRA) on Wednesday reduced the price of petrol by Rs3 per litre and high-speed diesel (HSD) by Rs7 per litre, effective November 12.
According to a press release issued by OGRA, the price of petrol has been reduced from Rs338 to Rs335 per litre. Similarly, the price of high-speed diesel has been cut from Rs371 to Rs364 per litre. The revised prices have been determined under the petroleum pricing mechanism approved by the federal government.
The government continues to levy Rs114 per litre in taxes and duties on petrol and Rs100 per litre on diesel. However, an arrangement announced on Nov 2 for 30 days states that oil refineries will contribute to the petroleum levy by bearing a cumulative impact of Rs15 billion, according to the government. This allows a Rs14.71 reduction in the petrol price at the consumer end.
To ease the public’s burden amid rising fuel prices due to the Middle East situation, the government rolled out the Prime Minister’s Fuel Relief Scheme across the country on Sept 17. The subsidy scheme applies to owners of motorcycles, rickshaws and vehicles of up to 800cc. The government and Jamaat-i-Islami held another round of negotiations today to formulate a way forward on relief in petroleum prices.
Fuel prices have seen significant volatility recently. The price of HSD has come down from a peak of Rs520.35 recorded on April 3. Its price had started rising from Rs281 per litre after the US-Iran war broke out on Feb 28. The petrol price had peaked at Rs458.41 on April 3 after beginning its upward trajectory from Rs266 in the first week of March.
In response to rising fuel prices amid the ongoing Middle East conflict, the government has reintroduced a raft of austerity measures. Under these measures, markets are required to close by 9pm, and fuel allocations for official vehicles have been cut by 50pc for three months. Since July 17, the government has been revising fuel prices on a near-daily basis due to fluctuations in international market prices following renewed hostilities between Iran and the US.
The petroleum minister stated that the cabinet and the prime minister had decided to give Ogra the responsibility of deciding fuel prices on a daily basis based on international market trends. Prior to this, the government had been announcing weekly revisions to fuel prices since early March, alongside measures for the conservation of fuel amid possible oil supply disruptions due to the conflict.
The federal government had also announced targeted relief measures in April to provide subsidised fuel. Petrol is mainly used in private transport, small vehicles, rickshaws and two-wheelers, and changes in its price affect the middle and lower-middle classes. Similarly, changes in diesel prices also impact the public at large, as it is mainly used in the heavy transport sector, power plants and large generators. Petrol and HSD are the major revenue earners, with monthly sales of about 700,000 to 800,000 tonnes, compared to just 10,000 tonnes of monthly demand for kerosene.
