The federal government on Friday reduced the prices of petrol and high-speed diesel by 12 paisas and 66 paisas per liter, respectively, with the latest rates to apply from Aug. 1-3.
The revision brings the retail price of petrol to Rs. 336.03/liter and diesel to Rs. 392.38/liter. These prices include Rs. 110/liter in taxes and duties on petrol and Rs. 96/liter on diesel. The government has also notified a Rs. 1.22/liter decrease to the price of kerosene oil, bringing it from Rs. 306.44/liter to Rs. 305.22/liter.
Separately, the Oil and Gas Regulatory Authority (OGRA) has increased the price of re-gasified liquefied natural gas for August to $25.83/mmBtu for SNGPL and $25.09/mmBtu for SSGCL due to the purchase of expensive spot cargoes amidst ongoing supply constrains from Qatar due to the Iran war. This would likely boost electricity prices for the month of August.
The government shifted to a daily price fixation mechanism for fuel prices last month following renewed hostilities between Iran and the United States. It had previously shifted to a weekly mechanism after the onset of hostilities in February, moving away from the earlier fortnightly review.
Announcing the decision, Petroleum Minister Ali Pervaiz Malik said the federal cabinet and Prime Minister Shehbaz Sharif had authorized OGRA to decide fuel prices on a daily basis based on international market trends, passing on the full impact of fluctuations to the consumer. The decision had prompted backlash from citizens and the All Pakistan Dealers Association, which had threatened a strike if its concerns over profit margins remained unresolved. The organization had given the government two weeks to address its concerns, with the deadline set to expire next week.
Primarily used in private transport, shifts to the price of petrol impact 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 for power generation and transport and can impact the prices of essential commodities.