Due to fluctuations in global oil prices, the federal government has announced a reduction in the price of high-speed diesel (HSD) by Rs5 per litre effective Monday, May 1, 2023.
HSD is commonly used in transport and agriculture sectors, and this decrease in price will have a positive impact on farmers who are already facing higher oil prices during the Kharif crop season.
The government charges a maximum rate of petroleum levy (PL) up to Rs50 per litre on petrol, high-speed diesel, and HOBC to boost revenue. However, it passed on the relief to consumers by reducing the price of HSD.
Following the fresh price cut, diesel will be sold at Rs288 per litre compared to the earlier price of Rs293.
While it was expected that the government would also reduce the price of petrol by Rs3.86 per litre, the existing price of petrol at Rs282 per litre has been maintained, denying relief to consumers.
Finance Minister Ishaq Dar announced that the price of petrol would remain unchanged at Rs282 per litre for the next fortnight while the price of high-speed diesel was reduced by Rs5 per litre to Rs288. In a video address, the finance minister announced that the prices of light-diesel oil and kerosene were being reduced by Rs10 to Rs164.68 and 176.07 per litre, respectively.
Dar said the finance ministry had tried its utmost to settle the matter of price changes in the nation’s favour after the recommendation from the Oil and Gas Regulatory Authority. He said the final price changes were settled after “many rounds” of discussion.
On April 15, Dar had announced an increase of Rs10 per litre in the price of petrol. The prices of diesel and light diesel oil had remained unchanged at Rs293 and Rs174.68 but the price of kerosene was increased by Rs5.78 to Rs186.07.
From April 1-15, the daily consumption of petrol in the country was around 20,000 tonnes and that of high-speed diesel was 15,500 tonnes.
It is estimated that around Rs8,000 to 10,000 tonnes of high-speed diesel was being smuggled into Pakistan daily, while the demand for Iranian petrol was less due to its slightly lower quality and the overall reduction in petrol demand.
Petrol is used by motorbikes and cars and is an alternative to CNG. Due to gas shortage and higher prices of LNG, CNG retail outlets had shut down during the recent winter season, forcing consumers in Punjab to depend on expensive petrol use for motorbikes and cars. Furthermore, the government has also reduced the price of kerosene oil by Rs10 per litre Kerosene oil is mainly used in remote areas of Pakistan for cooking purposes, especially in the northern part of the country where LPG was not available.
The Pakistan Army is also a key user of kerosene oil.
The government has also decreased the price of light diesel oil (LDO) by Rs10 per litre as well, and it will now be sold at Rs164.68 per litre compared to the old price of Rs174.68 per litre. LDO is mainly used in the industry.
The prices are based on Platts, and the dollar had witnessed a decline of Rs2.57 from 286.66 to Rs 284.09 during the last fortnight.
Overall, these price reductions are expected to bring relief to consumers and farmers, who have been struggling with high oil prices in recent times.
