Prime Minister Shehbaz Sharif has approved a reduction in the price of diesel by Rs10.86 per litre, effective from August 1, 2024, in response to declining global oil prices.
The price of petrol has been lowered by Rs6.17 per litre, kerosene oil by Rs6.32 per litre, and light diesel oil (LDO) by Rs5.72 per litre.
The Oil & Gas Regulatory Authority (Ogra) calculated the new consumer prices of petroleum products based on international market fluctuations.
The prices of Motor Spirit and High-Speed Diesel (HSD) for the upcoming fortnight, starting August 1, 2024, have been revised downward, according to a statement from the finance ministry.
The ministry noted that the price of HSD has been reduced to Rs272.77 per litre from Rs283.63, a decrease of Rs10.86 per litre. Since HSD is used in the agriculture and transport sectors, this price reduction is expected to have an inflationary impact on consumers.
The price of petrol has been reduced to Rs269.43 per litre from Rs275.60 per litre, marking a decrease of Rs6.17 per litre. Petrol is commonly used in motorbikes and cars and is considered an alternative to CNG, especially in Punjab, where CNG outlets operate on imported LNG.
The price of kerosene oil has been cut to Rs177.39 per litre from Rs183.71 per litre, reflecting a decrease of Rs6.32 per litre. Kerosene oil is primarily used for cooking in areas without access to liquefied petroleum gas (LPG) and is widely used in the northern regions, with the Pakistan Army being a major consumer.
The price of LDO has been reduced to Rs160.53 per litre from Rs166.25 per litre, representing a decrease of Rs5.72 per litre. LDO is mainly used in industry.
The government has been charging a petroleum levy of Rs60 per litre on both petrol and HSD, and a levy of Rs0.05 per litre on kerosene oil. No petroleum levy is being charged on LDO.
The government had set an ambitious target for collecting petroleum levy from oil consumers during the current financial year. As a result, the petroleum levy rate may be increased further to boost revenue collection.
Currently, there is no sales tax on these products, with revenue from sales tax going to the provinces, while the petroleum levy goes into federal coffers. Consequently, the federal government has raised the petroleum levy rate to increase revenue while keeping the sales tax on petroleum products at zero.
In a separate announcement, Ogra has raised the price of LPG by Rs2.28 per kilogramme for August 2024.
Effective from the start of the month, the price of LPG will rise to Rs236.66 per kg. This adjustment will also impact domestic LPG cylinder prices, with an 11.8kg cylinder now costing Rs2,796.26, an increase of Rs26.90. Commercial cylinder prices will increase by Rs103, bringing the new rate to Rs10,760.
Ogra’s recent notification outlines the updated LPG rates for August 2024. The new LPG price per kg is now Rs237, up from Rs235. Consequently, the domestic cylinder will be sold at Rs2,797, up from Rs2,770, while the commercial cylinder will be available at Rs10,760, up from Rs10,656.
These price adjustments are part of Ogra’s ongoing efforts to regulate the LPG market and ensure fair pricing for consumers.
