High-speed diesel (HSD) prices for the next fortnight have been slashed by Rs12.84 per litre, according to a Finance Division notification issued on Friday. Petrol prices, however, remain unchanged despite earlier estimates suggesting a possible increase.

 

The new prices took effect on Saturday, 16 August, and are reportedly based on recent exchange rate fluctuations and international market trends.

 
The Rs12.84 per litre decrease in HSD prices translates to a fall of approximately 4.7 percent in the price of the commodity. The new price of HSD rests at Rs272.99 per litre while the price of petrol remains at Rs264.61 per litre.

 

The federal government made the aforementioned changes to the price of petroleum products. It merits a mention that these changes were reportedly in line with recommendations made by the Oil and Gas Regulatory Authority (Ogra) and relevant ministries.

 

Data from reports has revealed that over the past two weeks, the price of diesel in the international market has reportedly decreased by approximately $4.5 per barrel. Petrol prices during the same period logged a marginal increase instead, growing by 15 cents per barrel.

 

According to reports from earlier this week, the rupee also recorded an increase in value, appreciating modestly against the dollar. For reference, an appreciation of the rupee makes it easier to purchase fuel domestically, as Pakistan is a net importer of petroleum-based fuels.

 
Prior to the rate cut, the price of HSD stood at a staggering Rs285.83 per litre. The price of HSD had recorded a significant increase before the government reduced prices since May 15, HSD rates shot up by Rs27 per litre.

 

Light diesel oil and Kerosene rates are projected to fall by approximately Rs8.2 per litre and Rs7.19 per litre, respectively. 

 

However, the drop in HSD prices is likely to have the most noticeable impact on the economy as it lowers the operating costs for both the transport and agriculture sectors. The decrease may benefit the economy by helping lower food prices. HSD is widely used in agriculture to power tractors and other mechanised farming equipment.

 

A decrease in HSD rates could also benefit the transport sector, given its reliance on fuel. For instance, the transportation sector has diesel as a primary input and thus requires vast quantities of the commodity. Lower HSD prices imply lower operational costs for businesses in the transportation sector.