The federal government on Wednesday night slashed the price of petrol by Rs5.66 per litre and that of high-speed diesel (HSD) by Rs1.39 per litre for the next fortnight.

According to a notification issued by the Finance Division, the petrol price now stands at Rs263.02 per litre from Rs268.68 per litre. Meanwhile, the price of diesel has dropped to Rs275.41 per litre from Rs276.81 per litre.

Meanwhile, superior kerosene oil (SKO) and light diesel oil (LDO) also experienced rate cuts, with SKO dropping in price from Rs184.97 per litre to Rs181.71 — a drop of Rs3.26. LDO price dropped by Rs2.74 from Rs165.50 per litre to Rs162.76.

The notification added that the new rates were decided on the recommendations from the Oil and Gas Regulatory Authority (Ogra) and the relevant ministries.

Widely used in motorcycles, rickshaws, and private vehicles, petrol has a direct impact on the budgets of middle- and lower-income households. HSD fuels heavy transport, agricultural machinery, and trains. Its price is considered highly inflationary, influencing the cost of food and other essential goods.

Although general sales tax (GST) is zero on all petroleum products, the government is charging Rs79.50 per liter on diesel and Rs80.52 per liter on petrol and high octane products on account of petrol levy and climate support levy. This also includes Rs2.50 per liter climate support levy (CSL).

The government is also charging about Rs17-18 per liter custom duty on petrol and HSD, irrespective of their local production or imports. In addition, about Rs17 per liter distribution and sale margins are going to oil companies and their dealers.