The caretaker federal government has made adjustments to fuel prices, notably reducing the cost of petrol by Rs8 per litre, effective from midnight today.

Consequently, the price of petrol has decreased from Rs267.34 to Rs259.34 per litre.

In contrast, the price of high-speed diesel (HSD) has been maintained at Rs276.21 per litre, with the decision justified by an adjustment in the exchange rate at Rs1.50 and a premium of $5.30 per barrel.

The finance ministry, in a statement, emphasised that these revisions in oil prices align with the recommendations provided by the Oil and Gas Regulatory Authority (Ogra).

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The decision-making process took into account various factors, including the petroleum levy (PL), general sales tax (GST), premium, exchange rate, and global oil prices.

The reduction in petrol prices raises expectations of increased consumption, particularly given the ongoing gas crisis in the country.

Petrol serves as an alternative to compressed natural gas (CNG) in vehicles, and the current situation might lead to a surge in its usage.

Conversely, the diesel price, crucial in the transport and agriculture sectors, remains unchanged, potentially contributing to inflation.

The announcement does not include any revisions for kerosene oil (SKO) or light diesel oil (LDO), which were anticipated to witness a decrease of Rs3 and Rs1.50 per litre, respectively.

Kerosene oil is widely used for cooking purposes in remote areas of Pakistan, where liquefied petroleum gas (LPG) is not readily available. Similarly, LDO is an essential component in industries.

The decision-making process also considered the global oil market dynamics, with Brent Oil prices decreasing by $1.5 per barrel from $84.50 to $83 since January 1, 2024.

Additionally, the HSD rate experienced a modest reduction of approximately $1 per barrel, falling from $97 to $95.80. It is noteworthy that during this period, the Pakistani rupee has gained ground against the US dollar by Rs3.