Pakistan Reduces Petrol Price by PKR 14 & High-Speed Diesel by PKR 13.5
Published on: December 16, 2023.
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The Pakistan caretaker government has recently announced a reduction in the prices of petrol and high-speed diesel (HSD). According to a notification from the Pakistan Ministry of Finance, petrol prices have been decreased by PKR 14 per litre, with the new prices being PKR 267.34. Similarly, the prices of HSD have been reduced by PKR 13.5 per litre, and the new price stands at PKR 276.21. This decision is effective for the next fortnight.
In addition to this, the prices of kerosene oil and light-diesel oil have also been lowered. Kerosene oil is now priced at PKR 191.02 per litre after a reduction of PKR 10.14, while light-diesel oil is priced at PKR 164.64 per litre after a reduction of PKR 11.29. These new prices will remain in place for the next two weeks.
Officials had previously stated that the prices of major petroleum products were expected to decrease by more than PKR 10 per litre each on December 15 due to a decline in the international market. The international prices of both oils had fallen by around five percent over the past fortnight, and the rupee had also gained slightly against the US dollar. These factors contributed to the decrease in domestic prices for consumers.
Meanwhile, the State Bank of Pakistan reported that the dollar had settled at PKR 283.51 on Thursday after losing value against the local currency. Despite importers facing difficulties in opening letters of credit, the market remained relatively stable. The foreign exchange reserves of Pakistan increased by $21 million to reach $7.04 billion during the week ending on December 8, as stated in a press release by the State Bank.
In order to maintain its reserves above the $7 billion level, the central bank has been purchasing dollars from the interbank market. The International Monetary Fund (IMF) has been emphasizing the need to increase reserves, but the country’s reserves are being heavily affected by debt servicing.
Furthermore, the government has already reached its budget target of collecting PKR 60 per litre through petroleum levy. This is the maximum limit allowed by law. However, the government is now hoping to exceed PKR 950 billion in petroleum levy collection by the end of June, surpassing the initial target of PKR 869 billion as set in the agreement with the IMF. The total petroleum levy collected during the first quarter, ending in September, was more than PKR 222 billion, even though the per litre rates had only increased slightly for petrol.
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