In a relief for consumers, the fuel price reduction in Pakistan has been announced, cutting petroleum prices by up to Rs5.31 per litre for the next two weeks. The adjustment, effective immediately, follows a review by the Oil and Gas Regulatory Authority (Ogra) based on international market trends. The government also lowered liquefied petroleum gas (LPG) prices by Rs6.15 per kg for March.
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Revised Fuel Prices
The Ministry of Finance issued a late-night statement confirming the changes in petroleum prices. The ex-depot price of high-speed diesel (HSD) dropped by Rs5.31, bringing it down to Rs258.64 per litre from Rs263.95. HSD is a critical fuel for heavy transport, agriculture, and industrial machinery, making its price fluctuations directly impactful on inflation.
Petrol prices saw a slight decrease of Rs0.50, setting the new rate at Rs255.63 per litre from Rs256.13. Petrol is the primary fuel for private vehicles, motorcycles, and rickshaws, significantly affecting middle-class and lower-middle-class budgets.
The price of kerosene oil, commonly used for household heating and cooking in rural areas, was lowered by Rs3.53, bringing the new rate to Rs168.12 per litre. Meanwhile, light diesel oil (LDO) dropped by Rs2.47, now costing Rs153.35 per litre.
Impact on Consumers and Economy
HSD price reductions typically influence transport costs, yet public transport fares rarely decrease in response. This price cut may ease inflation slightly, but the direct impact on essential goods and services remains uncertain.
Despite the price drop, the government still imposes significant taxes on fuel, charging around Rs76 per litre on petrol and HSD. While general sales tax (GST) remains at zero, a petroleum development levy (PDL) of Rs60 per litre is applied to both petrol and HSD.
LPG Price Reduction
Ogra also announced a cut in LPG prices by Rs6.15 per kg for March.
Looking Ahead
The fuel price adjustment aligns with global oil market trends, but future changes will depend on international crude prices and currency fluctuations. While the reduction offers temporary relief, the overall cost of living remains high due to fuel taxation and ongoing economic challenges.
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