After a decline in global oil prices due to coronavirus-induced lockdowns, the government made a major cut of Rs27.15 per liter in the price of high-speed diesel (HSD) for May 2020.
After the review, the HSD price will fall to Rs80.10 per liter, compared to the current Rs107.25 per liter.
The Oil and Gas Regulatory Authority (OGRA) suggested a decrease in HSD prices of Rs33.94 per liter, which is mainly used in the transport and agriculture sectors. The government, however, passed an Rs27.15 relief per liter to the consumers. The demand for diesel has risen with the start of the harvest season, which has led the government to lift the ban on its imports.
The government also decreased the petrol price by Rs15 per liter compared with the initial reduction of Rs20.68 per liter, or 21.4%. Compared with Rs96.58, oil would now be sold for Rs81.58 per liter.
The government reduced the price of light diesel oil (LDO) by Rs15 per liter. OGRA had proposed a cut of Rs24.57 per liter or 39.3% in its price, which is an industrial fuel. As per the government directions, its price has come down to Rs47.51 per liter from Rs62.51.
The government also decreased the price of kerosene oil by Rs30.01 per liter.
In addition, the federal government has reduced the sales tax and has surged the petroleum tax in a proposal to collect more revenue for the federal purse to meet its high revenue requirement.
Pakistan is a net importer of petroleum products and, through imports, meets almost 85 per cent of its needs. Depreciation of the rupee has played a key role in rising the prices of petroleum products, which has fueled inflation in the region.