The federal government on Thursday night slashed the price of petrol by Rs7.54 per litre while raising that of high-speed diesel (HSD) by Rs1.48 per litre for the next fortnight.

Widely used in motorcycles, rickshaws, and private vehicles, petrol has a direct impact on the budgets of middle- and lower-income households. HSD fuels heavy transport, agricultural machinery, and trains. Its price is considered highly inflationary, influencing the cost of food and other essential goods.

In a press release issued today, the Finance Division stated that the price of petrol was set at Rs264.61 per litre and that of HSD at Rs285.83 per litre.

It added that it decided on these new rates “following a review of prevailing international market trends” and upon the recommendations from the Oil and Gas Regulatory Authority (Ogra) and the relevant ministries.

Sources had previously said that after four consecutive hikes, petrol and diesel prices were expected to fall by about Rs9 and Rs3.50 per litre, owing to lower international oil prices and reduced import premiums.

Based on prevailing tax rates, the ex-depot price of petrol was estimated to decline by around Rs9 per litre (3.3 per cent), while HSD was expected to see a reduction of Rs3.50 per litre (1.3pc), depending on final cost calculations.

According to informed sources, global oil prices softened slightly over the past fortnight, while the import premium on petrol dropped by nearly one-third — from about $9.70 to $6.75 per barrel — as regional tensions eased.

The government is currently collecting about Rs98 per litre on both petrol and diesel through various levies, despite maintaining a zero rate of general sales tax (GST) on all petroleum products. This includes Rs77.01 per litre on diesel and Rs78.02 per litre on petrol and high-octane products as petroleum levy and climate support levy (CSL), of which Rs2.25 per litre is attributed to CSL alone.

In addition, Rs20-21 per litre is being charged as customs duty on both fuels, regardless of whether they are imported or locally refined. Distribution and dealer margins account for another Rs17 per litre.

Petrol and HSD remain the government’s main petroleum revenue sources, with combined monthly sales of around 700,000-800,000 tonnes. In contrast, kerosene demand stands at just 10,000 tonnes per month. The government collected Rs1.161 trillion through petroleum levy in 2024-25 and projects a 27pc increase — reaching Rs1.470tr — in the current fiscal year.

Ogra slashes LPG price by Rs17.7 per kg

Earlier, Ogra reduced the price of liquefied petroleum gas (LPG) by Rs17.7 per kilogramme.

Last month, Ogra notified a decrease in the price of LPG by Rs7.51 per kg or 3.1 per cent for July. The new price for 11.8kg cylinder was Rs2,750.6 for July, against Rs2,838.31 for June. It said that the LPG producer price was linked with Saudi Aramco-CP and US dollar exchange rate.

In a notification from the regulator today, available with Dawn.com, Ogra set the new consumer price for an 11.8kg cylinder at Rs2,541.36 for August, compared to Rs2,750.6 last month. The maximum consumer price for LPG per kg was set at Rs215.37.

These prices will go into effect on August 1 (Friday).

The prices “shall be regulated as the maximum LPG price at all levels of the supply chain for indigenous as well as imported LPG”, Ogra said.

The notification also showed that the new producer price for an 11.8kg cylinder stood at Rs2,054.02.

This is the third month in a row where LPG prices have fallen, with an 11.8kg cylinder costing Rs2,892.91 in May, Rs2,838.31 in June and Rs2,750.6 in July.

Earlier this month, a parliamentary panel expressed concern over the “poor regulatory environment” in the petroleum sector, observing that lives were in danger after an official disclosure that almost half of a total of 2,000 bowsers handling LPG have not been registered anywhere.

Of an estimated 2,000 bowsers in operation, only 800 are registered with the Department of Explosives and just 247 have licences issued by Ogra. This points to a significant oversight lapse, the participants observed.