Pakistan cuts petrol by Rs5.45 and diesel by Rs3.68 a litre from 4 November, under its new daily fuel pricing review
The federal government has cut petrol by Rs5.45 a litre to Rs369.06 and high-speed diesel by Rs3.68 to Rs391.52 from 4 November, the Oil and Gas Regulatory Authority notified on Tuesday evening.
The federal government has reduced the price of petrol by Rs5.45 per litre and high-speed diesel by Rs3.68 per litre, with the new rates taking effect from Wednesday, 4 November, according to a notification issued by the Oil and Gas Regulatory Authority (OGRA) on Tuesday evening. Petrol will now retail at Rs369.06 per litre, down from Rs374.51, while high-speed diesel will cost Rs391.52 per litre, down from Rs395.20.
The announcement, reported by Dawn, Geo News and The Express Tribune on Tuesday night, is the second cut in two days. On Monday the government had already lowered diesel by Rs7.76 per litre and petrol by Rs3.40 per litre, taking diesel to Rs395.20 and petrol to Rs374.51 before Tuesday’s further reduction. Taken together, the two rounds have brought petrol down by Rs8.85 and diesel by Rs11.44 per litre from where they stood before Monday’s revision.
OGRA said the revised ex-depot prices were set under the federal government’s petroleum products pricing mechanism, and that the adjustments reflected global developments, including changes in Platts rates, premiums and incidental costs. The regulator has also begun publishing daily petroleum prices on its website, a step officials say is meant to improve transparency and to pass changes in international oil prices on to consumers more quickly.
That daily system is itself new. The federal cabinet and the prime minister decided that OGRA would henceforth decide fuel prices on a daily basis, based on international market trends, Petroleum Minister Ali Pervaiz Malik told a press conference on Tuesday. Under the previous practice, prices were typically revised for a fortnight at a time, which meant consumers could wait days or weeks for a fall in world prices to reach the pump, or be shielded for a time when world prices rose.
The latest cut also sits inside a wider, unusual arrangement announced on Monday for the petroleum sector. The government said domestic refineries would absorb part of their windfall profits for 30 days, contributing about Rs50 per litre to the petroleum levy, a cumulative impact of roughly Rs15 billion over the month, so that a looming Rs15 per litre increase in petrol prices last Friday could be avoided. Officials said refineries had earned more profit in the last three months than in a year, helped by government arrangements for crude supplies at maximum throughput, while import premiums had risen from a pre-war benchmark of $5–6 per barrel to more than $20, with some tenders by Pakistan State Oil attracting premiums above $30.
Even after the cut, taxes and duties remain a large part of the pump price. Dawn reported that the government continues to levy Rs114 per litre in taxes and duties on petrol and Rs100 per litre on diesel. That is why, for all the relief of the last two days, the price at the pump remains far above the levels motorists were paying in calmer years, and why every revision is watched so closely by transporters, farmers and households already coping with high food and energy costs.
The petroleum minister used Tuesday’s press conference to look beyond petrol and diesel as well. He said efforts were being made to introduce a similar pricing system for liquefied petroleum gas (LPG), which has been at the centre of a separate crisis in recent days, with the government announcing on Tuesday that it would abolish the discretionary LPG quota system and auction domestic supplies in transparent lots. Ministers have promised that the LPG reform will break a monopoly they blame for inflated cylinder prices, a problem that has hit rickshaw drivers and low-income households particularly hard.
The fuel announcements also arrived in the middle of a political negotiation over relief. The government and Jamaat-i-Islami held what both sides called candid discussions on Tuesday, led on the government side by Deputy Prime Minister Ishaq Dar, on practical measures to help low-income citizens with petroleum prices. The party has demanded abolition of the petroleum levy and warned of resuming its postponed march to Islamabad by mid-November if no relief is announced, while the government has said it will complete a working paper on a relief package, with further talks to follow.
For ordinary consumers, the immediate effect is straightforward: filling a car or motorcycle tank from Wednesday will cost less than it did on Tuesday, and diesel users — from truck and bus operators to farmers running tube wells and tractors — will see a smaller bill as well. Whether that relief lasts, however, will depend on the daily mechanism itself. If international prices keep falling, the daily review should pass further cuts on quickly; if they rebound, or if the war-related disruption to Gulf shipping worsens, prices could rise just as fast, and the refinery arrangement that cushioned this week’s adjustment is time-limited to 30 days.
What happens next, then, is a test of the new system as much as of the market. Motorists will be watching OGRA’s daily postings, the government and Jamaat-i-Islami will return to the table over a broader relief package, and the petroleum minister has said he will meet refineries to address their complaints about changes to the pricing formula made without prior consultation. For now, the confirmed position is the one in Tuesday night’s notification: petrol at Rs369.06 and diesel at Rs391.52 from 4 November, the second cut in two days, delivered through a pricing mechanism that will now be reviewed every day.
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