The federal government on Sunday cut the prices of petrol and high-speed diesel (HSD) by Rs 2 and Rs 4.79, respectively, for the next fortnight.
According to a notification from the Petroleum Division, the new price of HSD is Rs 279.65 per litre, while the new rate of petrol is Rs 263.45. Prices will go into effect on December 1.
“The government has revised the prices of petroleum products based on the recommendations of Ogra (Oil and Gas Regulatory Authority),” a notification from the Petroleum Division said.
Most of the transport sector is powered by HSD and its price is considered inflationary as it is mainly used in heavy transport vehicles, trains and agricultural engines such as trucks, buses, tractors, tube wells and threshers and in particular increases the prices of vegetables and other grocery products.
Gasoline is mainly used in private transport, small vehicles, rickshaws and two-wheelers, and directly impacts the budgets of the middle and lower-middle classes.
The government charges around Rs 99 per liter for both petrol and diesel. Although the general sales tax (GST) is zero for all petroleum products, the government charges Rs 79.50 per liter for diesel and Rs 80.52 per liter for petrol and high-octane products on account of petrol tax and climate support tax.
It also charges Rs 17-18 per liter customs duty on petrol and HSD, irrespective of its local production or imports. Additionally, around Rs 17 per liter of distribution and sales margins will go to oil companies and their distributors. Gasoline and HSD dominate consumption with between 700,000 and 800,000 tons per month, compared to approximately 10,000 tons for kerosene.
Oil tax collection reached Rs 1.161 trillion in FY25 and is projected to increase by about 27 percent to Rs 1.47 trillion in the current fiscal year.
