Pakistan's caretaker government announced a reduction in the prices of petroleum products, except petrol, for the next fortnight starting December 1, 2023. The decision was made due to lower prices in the international market. However, the government increased the price of liquefied petroleum gas (LPG) by 1.5%. The new prices will remain in effect until December 31, 2023.

The Ministry of Finance announced late on Thursday that the government had decided to revise the fuel prices for the fortnight starting December 1, as recommended by the Oil & Gas Regulatory Authority (Ogra).

The ex-depot price of petrol was kept unchanged at Rs281.34 per liter. On the other hand, the price of high-speed diesel (HSD) was reduced by Rs7 per liter while those of kerosene and light diesel oil were also cut by Rs3.82 and Rs4.52 per liter, respectively.

As a consequence, the ex-depot price of HSD was set at Rs289.71 per liter against the existing Rs296.71. The retail price at petrol pump would, however, be well above 290.50. Likewise, the ex-depot price of kerosene was set at Rs201.16 per liter against the existing Rs204.98.

The ex-depot rate for light diesel oil was fixed at Rs175.93 per liter instead of Rs180.45.

LPG Price Increase

On the other hand, the government increased the price of liquefied petroleum gas (LPG) by about 1.5pc, or Rs45.18 per 11.8kg domestic cylinder for December. The LPG price increase is on top of a net increase of almost 26.2pc over the last three months. For November, the LPG price had come down by 3.8pc after a cumulative 29pc increase for September and October.

Reasons for Price Changes

Ogra attributed the increase in LPG price to exchange rate loss as international price of the commodity remained unchanged in the Saudi market. "The LPG producer price is linked with Saudi Aramco-CP and US dollar exchange rate," said the regulator, adding "as compared to the previous month Saudi Aramco-CP has remained unchanged. The average dollar exchange rate has, however, gone up by 1.87pc, resulting...increase in LPG consumer price by Rs45.18/11.8 kg cylinder (1.5pc)".

New Prices

The new prices will remain in effect until December 31, 2023.

Conclusion

The reduction in the prices of petroleum products is a welcome relief for Pakistani consumers. However, the increase in the price of LPG is likely to have a negative impact on household budgets.