The government on Wednesday slashed the price of high-speed diesel by Rs. 32.63/liter while raising the price of petrol by Rs. 2.97/liter, with the new rates applicable for Aug. 20.
The latest revision under the daily price fixation mechanism brings the retail price of petrol to Rs. 337.51/liter and that of diesel to Rs. 363.06/liter. These prices include Rs. 114/liter in taxes and duties on petrol and Rs. 100/liter on diesel.
According to Petroleum Minister Ali Pervaiz Malik, the drastic cut in diesel price is a result of negotiations with oil refineries on directions of Prime Minister Shehbaz Sharif. In a press conference, he said the reduction would primarily benefit farmers using tractors and tube-wells, as well as students traveling by buses. He also thanked oil refineries for accepting the government’s request, maintaining the full benefit would be passed onto consumers.
The government is fixing fuel prices on a daily basis amidst fluctuations in international market prices following renewed hostilities between Iran and the U.S. Malik has said the move seeks to boost transparency and pass on the full impact to consumers immediately.
The daily price fixation mechanism was implemented last month, replacing a weekly mechanism implemented in early March. Prior to the outbreak of the Middle East conflict, the government used to set prices fortnightly.
Both the All Pakistan Dealers Association and the Transport Goods Association have rejected the daily pricing mechanism, with the latter suspending a strike over assurances the price fixation mechanism would be revised.
Primarily used in private transport, changes to the price of petrol tend to impact the middle and lower-middle classes, who use it for their daily commute. Changes in diesel prices, meanwhile, are considered inflationary, as increased hike the cost of heavy transport and can drive up the prices of essential commodities.