The caretaker government has announced a significant reduction in petrol and diesel prices due to a combination of factors. The decrease in international oil prices and the strengthening of the Pakistani rupee against the US dollar have contributed to this price cut.
As a result of this adjustment, the new price of petrol will be Rs. 283.38 after a reduction of Rs. 40 per liter, and the new price of high-speed diesel will be Rs. 303.18 after a reduction of Rs. 15 per liter.
This move follows a previous price reduction of Rs. 8 per liter for petrol and Rs. 11 per liter for high-speed diesel at the last fortnightly review of petroleum prices. It’s worth noting that prior to this reduction, the interim government had increased petrol prices by Rs. 58.43 per liter and high-speed diesel prices by Rs. 55.84 per liter in the three preceding reviews.
These changes in fuel prices are primarily influenced by fluctuations in international oil prices and the exchange rate of the Pakistani rupee against the US dollar. The rupee has appreciated by 10.6 percent or Rs. 29.5 against the dollar since September 5, 2023.
While this reduction in fuel prices provides some relief to consumers, there is a note of caution as oil prices are expected to rise again due to the ongoing conflict in the Middle East. It’s also worth mentioning that the government has recommended an increase in the profit margins of oil marketing companies (OMCs) and petroleum dealers, which is expected to benefit these businesses.
These adjustments in fuel prices have implications for the broader economy, particularly in the context of inflation. The reduction in fuel prices comes at a time when fuel costs have been a significant driver of high consumer prices, pushing inflation to 31.4 percent in September. Therefore, this reduction in petrol and diesel prices is seen as a measure to curb the rising inflationary trend.
In summary, the caretaker government has lowered petrol and diesel prices by Rs. 40 and Rs. 15 per liter, respectively, in response to changes in international oil prices and the exchange rate. While this provides relief to consumers, the ongoing conflict in the Middle East and other factors may impact future prices. This reduction is also aimed at curbing inflation, which has been driven by high fuel costs.