Government Reduces Petrol and Diesel Prices
- The government reduced fuel prices across the country, lowering petrol by Rs1.70 per litre and high-speed diesel by Rs3.12 per litre, according to a Petroleum Division notification.
- High-speed diesel prices retreated from a peak of Rs520.35 recorded on April 3.
- Alongside the price adjustment, the government reintroduced a package of austerity measures to cope with rising fuel expenses driven by the Middle East conflict.
The government reduced fuel prices across the country, lowering petrol by Rs1.70 per litre and high-speed diesel by Rs3.12 per litre, according to a Petroleum Division notification. Following the revision, petrol retails at Rs392.05 per litre, while high-speed diesel costs Rs418.96 per litre. The new pricing structure takes effect on Sept 23 (Wednesday). Despite the decrease, the government continues to levy substantial taxes and duties, maintaining a charge of Rs114 per litre on petrol and Rs100 per litre on diesel.
Trajectory of Fuel Prices and Peak Costs
High-speed diesel prices retreated from a peak of Rs520.35 recorded on April 3. Diesel costs had previously climbed sharply from Rs281 per litre after conflict broke out between the United States and Iran on February 28. Similarly, petrol reached a peak of Rs458.41 per litre on April 3, after starting an upward trajectory from Rs266 in the first week of March. Petrol is primarily used in private transport, small vehicles, rickshaws, and two-wheelers, meaning price fluctuations directly impact middle and lower-middle-class consumers. Diesel serves the heavy transport sector, power plants, and large generators, affecting the broader public. Together, petrol and high-speed diesel constitute major revenue earners with monthly sales ranging between 700,000 and 800,000 tonnes, contrasted with kerosene demand of just 10,000 tonnes monthly.
Austerity Measures and Daily Pricing Mechanism
Alongside the price adjustment, the government reintroduced a package of austerity measures to cope with rising fuel expenses driven by the Middle East conflict. Under these rules, commercial markets must close by 9 PM, and official vehicle fuel allocations face a 50 percent reduction for a three-month period. Prime Minister Shehbaz Sharif previously announced a relief scheme on September 13, aimed at users of motorcycles, autos, and vehicles up to 800cc to alleviate the financial strain of global oil costs. These updates follow a shift in policy announced on July 17 by Petroleum Minister Ali Pervaiz Malik, who stated that fuel prices would be fixed on a daily basis due to international market volatility stemming from renewed hostilities between Iran and the United States. The cabinet and prime minister delegated daily pricing decisions to the Oil and Gas Regulatory Authority based on international market trends.