ISLAMABAD:
The government slashed the price of high-speed diesel (HSD) by up to Rs32.12 per litre to ease inflationary pressure and transport costs following easing tensions in the Middle East.
Prime Minister Shehbaz Sharif approved the reduction in HSD price on Fridayfrom Rs385.54 to Rs353.43 per litre. The Prime Minister’s Office announced the decision.
The government said it would pass on the impact of declining international oil prices to the public as quickly as possible. Petrol prices, however, remained unchanged at Rs366.58 per litre.
Last week, the government slashed the price of HSD by over Rs134.8 per liter and petrol price by Rs11.8.
The steep reduction in diesel, a key fuel for transport and agriculture, may immediately relieve inflation-hit consumers and businesses, potentially easing food prices and logistics costs.
With the easing of the war situation and hopes for upcoming US-Iran peace talks, oil prices dropped by 9%, providing relief to consumers worldwide, including Pakistan.
The government is charging a petroleum levy of Rs80.61 per liter for retail sales of petrol and Rs89.25 per liter for direct sales, while HOBC attracts significantly higher rates exceeding Rs305.37 per litre.
The government is not charging a petroleum levy on HSD. It also charges a Rs20.36 per liter levy on kerosene oil, Rs15.84 per liter on light diesel oil, and Rs77 per liter on furnace oil. Consumers also pay a Rs2.50 per liter climate support levy on each litre of HSD, petrol, kerosene oil, and furnace oil.
Some experts said the US had been exploiting the Iran war situation and secured future oil contracts at higher rates.
The local oil industry claimed that the Oil and Gas Regulatory Authority (OGRA) had not cleared price differential claims worth over Rs100 billion, which could cause the entire supply chain to collapse. OGRA on Friday cleared Rs38 billion in price differential claims to pass on to the oil industry.
They said the government had not included the prices of oil cargoes that the oil industry imported at higher rates, hoping the government would make adjustments later when prices are slashed.
Now the oil industry is not only facing financial risk due to price differential claims, but it is also facing a burden for not passing on the impact of oil cargoes which were imported at higher rates.
