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The federal government of Pakistan has recently announced a reduction in fuel prices, bringing some relief to the public. This decision, effective from August 1, 2024, was confirmed through a notification issued by the Finance Ministry. This reduction comes after a period of increasing fuel costs and is expected to impact the economy and daily lives positively. In this article, we will explore the details of the new prices, the reasons behind the changes, and the potential implications for the future.
According to the most recent announcement, a liter of petrol now costs Rs. 6.17 less. The new price of petrol is set at Rs. 269.43 per liter, down from the previous rate of Rs. 275.60 per liter. Similarly, the price of high-speed diesel (HSD) has also seen a significant decrease. The new price of HSD is Rs. 272.77 per liter, reflecting a reduction of Rs. 10.86 from the previous price of Rs. 283.63 per liter.
This reduction follows two consecutive hikes in petrol prices in Pakistan. Earlier reports had predicted a decrease in fuel prices, but the actual reduction has been more substantial than expected. Initially, it was estimated that petrol prices would decrease Rs. 5.50 per liter and HSD costs Rs. 11.06 per liter respectively. Additionally, the prices of kerosene oil and light diesel oil (LDO) were projected to drop by Rs. 5.84 and Rs. 5.07 per liter, respectively.
The change in local fuel prices is influenced by fluctuations in the international oil market. Over the past fourteen days, there has been a noticeable decline in the international prices of key petroleum products. Industry insiders reported that the price of petrol dropped by approximately $2 per barrel, from $89.50 to $87.50. In the same way, HSD prices dropped from $96.93 to $94, or around $2.93 per barrel.
While the recent reduction in fuel prices is a welcome change, there is a possibility that the relief could be short-lived if the government decides to increase the petroleum levy. Sources have indicated that a potential increase of Rs. 5 per liter in the petroleum levy for both petrol and diesel could significantly offset the current reductions.
In the last two fortnightly reviews, ending on July 31, 2024, fuel prices in Pakistan had seen substantial hikes. Petrol prices had increased by Rs. 17.44 per liter, while diesel prices had gone up by Rs. 15.74 per liter. These consecutive increases had put a strain on consumers and businesses, making the recent reduction a significant relief.
The recent adjustment in fuel prices has garnered mixed reactions from the public. While many are relieved by the reduction, there are concerns about the sustainability of these prices. The potential increase in the petroleum levy and the volatility of international oil prices remain key factors that could influence future price adjustments. The public is encouraged to share their thoughts and opinions on the revised petrol prices in Pakistan.
The reduction in petrol and diesel prices in Pakistan is a positive development for consumers and the economy. The new prices, effective from August 1, 2024, provide some relief after a period of rising costs. However, the potential increase in the petroleum levy and fluctuations in the international market could impact future prices. It is crucial for the government to balance these factors to ensure stable and affordable fuel prices for the public.