The government on Friday announced a reduction to the prices of fuel products in line with a global downturn following the end of the U.S.-Iran war, with petrol facing a Rs. 74/liter cut and diesel Rs. 67/liter.
“Petrol prices are being reduced by Rs. 74/liter and diesel prices by Rs. 67/liter. As a result, the price of petrol will fall from Rs. 373 to Rs. 299/liter, while diesel will decrease from Rs. 378 to Rs. 311/liter,” read a statement issued by the Prime Minister’s Office.
In a separate notification, the Petroleum Division said the new prices would be effective for a week, starting June 20 (Saturday).
Additionally, the government reduced the price of kerosene oil by Rs. 48.29/liter, bringing it from Rs. 282.19/liter to Rs. 233.90/liter.
According to local media, the reduction includes a rationalization of the petroleum levy, which government ministers have previously defended as necessary under the International Monetary Fund (IMF)’s Extended Fund Facility for Pakistan. During the war, amidst much higher global rates for diesel than petrol, the government had cross-subsidized diesel by increasing the levy on petrol and reducing it on diesel.
The latest petrol price sees a Rs. 40.49/liter cut to the levy on petrol, bringing it from Rs. 106.74 to Rs. 66.25/liter, while the levy on diesel has been increased from Rs. 53.26 to Rs. 72.97/liter, a change of Rs. 19.71/liter.
Earlier, in an address to the National Assembly, the prime minister had said the government was immediately passing on the benefits of lowering global oil prices to the public. “We had made a promise to the nation and, by the grace of Allah, we are now fulfilling it,” he said, while acknowledging the difficulties faced by citizens due to the conflict.
He noted the federal government had used Rs. 129 billion from development allocations and savings generated through austerity measures to provide relief and shield consumers from the full impact of rising fuel prices. He further vowed that any further decline in global oil prices would be passed onto consumers.
At the height of the conflict, petrol peaked at Rs. 458.4/liter, while diesel went as high as Rs. 520.35/liter.
Shifts to the price of petrol, primarily used by commuters in small vehicles, affect middle and lower-middle-class households. Diesel, however, it considered inflationary, as it is mostly used in the transport sector and increases to it can drive up prices of essential commodities.