On Wednesday night, the federal government cut the price of petrol by Rs 5.66 per liter and high speed diesel (HSD) by Rs 1.39 per liter for the next fortnight.
According to a notification issued by the Finance Division, the price of petrol now stands at Rs 263.02 per liter from Rs 268.68 per litre. Meanwhile, diesel price has come down to Rs 275.41 per liter from Rs 276.81 per litre.
Meanwhile, premium kerosene (SKO) and light diesel oil (LDO) also saw rate cuts, with the price of SKO dropping from Rs 184.97 per liter to Rs 181.71, a drop of Rs 3.26. LDO price fell by Rs 2.74 from Rs 165.50 per liter to Rs 162.76.
The notification adds that the new rates have been decided based on the recommendations of the Oil and Gas Regulatory Authority (Ogra) and relevant ministries.
Widely used in motorcycles, rickshaws and private vehicles, gasoline has a direct impact on the budgets of low- and middle-income households. HSD powers heavy transport, agricultural machinery and trains. Its price is considered highly inflationary, influencing the cost of food and other essential goods.
Although the general sales tax (GST) is zero for all petroleum products, the government is charging Rs 79.50 per liter for diesel and Rs 80.52 per liter for petrol and high-octane products due to petrol tax and climate support tax. This also includes the climate support levy (CSL) of Rs 2.50 per litre.
The government also charges Rs 17-18 per liter customs duty on petrol and HSD, irrespective of its local production or imports. Additionally, distribution and sales margins of around Rs 17 per liter will go to oil companies and their distributors.
