Fuel Prices Slashed by Rs1.97: Government Announces Immediate Relief

The federal government has slashed petrol and high-speed diesel prices by Rs1.97 per litre, delivering immediate consumer relief amid ongoing fuel pricing reforms.

According to an official notification dated Friday, petrol will now cost Rs297.53 per litre. Meanwhile, high-speed diesel (HSD) rates drop to Rs309.50 per litre. These revised prices take effect immediately.

Offsetting Carbon Tax Increase

The latest adjustment follows the government\’s recent hike in the carbon tax on petroleum products from Rs2.50 to Rs5 per litre. This increase forms part of new fiscal year measures. However, officials state that the higher carbon tax\’s impact was neutralized by a corresponding cut in the petroleum levy. Consequently, retail fuel prices avoided a significant rise.

In addition, the revised carbon tax now applies to high-octane fuel and furnace oil. Its full impact is expected to become clearer during future fuel price reviews.

New Stabilisation Fund Launched

Separately, the government has established a Petroleum Prices Stabilisation Fund (PPSF) to cushion consumers from global oil price swings. The Ministry of Finance issued a notification creating a dedicated account after federal cabinet approval.

Under this new mechanism, fund proceeds will enter the Public Account of the Federation under the Special Deposit Fund. The operational framework will be jointly developed by the Finance Division, Petroleum Division, and the Oil and Gas Regulatory Authority (OGRA). Detailed procedures will follow necessary approvals.

The Finance Division has also informed the State Bank of Pakistan, federal ministries, and provincial governments about the fund\’s establishment. This ensures smooth implementation across relevant entities.

Long-Term Fuel Stability Goals

The stabilisation fund aims to improve fuel price management. It seeks to reduce international market volatility\’s impact on consumers. Meanwhile, it supports long-term energy pricing stability. This initiative marks a strategic move toward sustainable fuel pricing in the country.

Read More: Government raises carbon tax on petrol, diesel