TRADE & ECONOMY

Big drop in petrol prices sends wave of happiness to inflation-stricken masses

2023-10-16
Big drop in petrol prices sends wave of happiness to inflation-stricken masses

For the second consecutive fortnight, the Caretaker Prime Minister Anwaarul Haq Kakar's administration has reduced petrol and high-speed diesel (HSD) prices for the next 16 days until October 31, attributed to a decline in the international market and an appreciation of the rupee's value.

 

Petrol prices have been cut by Rs40 per litre, while HSD has been lowered by Rs15 per litre, resulting in an ex-depot price of around Rs284 per litre for petrol.

 

However, the government has increased the petroleum levy on HSD by Rs5, reaching a historic high of Rs55 per litre, just below the Rs60 maximum permissible limit. The move is aimed at collecting about Rs869 billion in petroleum levy during the current fiscal year, in line with budget targets and commitments to the International Monetary Fund (IMF).

 

This price adjustment is driven by the international petroleum market's downward trend and the appreciation of the Pakistani rupee against the US dollar, providing relief to consumers and potentially impacting the budgets of middle- and lower-middle-class citizens who primarily use petrol. Similarly, HSD, a primary fuel for the transport sector, will see a reduction in its price, though the retail price at the pump may exceed Rs304 per litre.

 

 The decrease in prices for kerosene oil and light diesel oil (LDO) will also bring relief to consumers. Kerosene oil will now cost Rs215.28 per litre, down by Rs22 per litre, and LDO's ex-depot rate is set at Rs193.45 per litre instead of Rs212.45.

 

These adjustments may help mitigate inflationary pressures, especially on prices of vegetables and food items. Previously, between August 15 and September 15, petrol and high-speed diesel prices had surged by Rs58.43 and Rs55.83 per litre, reaching a historic high of Rs331-333 per litre at the retail stage until September 30.