The federal government has reduced petrol prices by Rs3 per litre and High-Speed Diesel (HSD) by Rs7 on Wednesday, bringing the price of petrol down to Rs335 per litre and diesel to Rs364, according to a notification issued by the Oil and Gas Regulatory Authority (OGRA).
The revised prices took effect on Thursday, November 12, amidst a decline in international oil prices, easing concerns over an escalation of the Middle East conflict and worries about a possible oversupply in the market.
Brent crude futures fell by $1.47, or 1.58 percent, to $91.29 per barrel, while United States (US) West Texas Intermediate (WTI) crude dropped by $1.24, or 1.43 percent, to $85.29 per barrel.
The decline followed reduced concerns about a further escalation of the conflict in the Middle East, which lowered the risk premium in crude markets.
The latest reduction also came under an arrangement announced on November 2, under which oil refineries agreed to bear a cumulative impact of Rs15 billion towards the petroleum levy over 30 days.
On September 17, the government introduced the Prime Minister’s Fuel Relief Scheme across the country to reduce the burden of rising fuel costs linked to the Middle East situation. The scheme covered owners of motorcycles, rickshaws and vehicles with engine capacities of up to 800cc.
The government also reintroduced austerity measures in response to rising fuel prices. Under the measures, markets must close by 9pm, while authorities cut fuel allocations for official vehicles by 50 percent for three months.
HSD prices had fallen from a peak of Rs520.35 per litre recorded on April 3. Diesel had started rising from Rs281 per litre after the US-Iran war began on February 28.
Petrol had also reached Rs458.41 per litre on April 3 after climbing from Rs266 in the first week of March.
Petrol mainly serves private transport, small vehicles, rickshaws and motorcycles, making its price changes relevant to middle and lower-middle-income households. Diesel, meanwhile, powers heavy transport, power plants and large generators.
