The federal government on Friday notified reductions to the price of petrol and high-speed diesel by Rs. 2.20/liter and Rs. 1.50/liter, respectively, with the latest rates to remain applicable from Aug. 8-10.
Following the latest revision under the daily price fixation mechanism adopted last month, the consumer cost of petrol stands at Rs. 327.62/liter, while diesel is at Rs. 380.86/liter. The government is presently charged Rs. 114/liter in taxes and duties on petrol and Rs. 100/liter on diesel.
The Oil and Gas Regulatory Authority (OGRA) has also reduced the price of kerosene oil by Rs. 1.50/liter to Rs. 289.95/liter.
According to Petroleum Minister Ali Pervaiz Malik, the daily prices are based on a seven-day average of international market prices, in line with international practice. He has defended the shift to daily price fixation as necessary to improve transparency and allow international price changes to be passed on to consumers more quickly.
The government switched to a weekly price fixation of fuel products from a fortnightly review shortly after the outbreak of hostilities between Iran and the United States on Feb. 28. This was further revised to a daily mechanism amidst renewed hostilities last month.
Primarily used in private transport, changes to the price of petrol tend to affect the middle and lower-middle classes, who use it for their daily commute. Changes to the price of diesel, meanwhile, can prove inflationary as it is used in the heavy transport sector and can impact the prices of essential commodities.