The federal government has reduced the price of petrol by Rs2.27 per litre and High-Speed Diesel (HSD) by Rs3.56 per litre, bringing the rates to Rs389.03 and Rs404.97 per litre respectively from Sept 29.
The revision comes as global oil prices rose on Monday before easing from session highs after expectations emerged that Qatari mediators will hold talks with the United States (US) and Iran over a possible peace deal.
Brent futures rose 91 cents, or 0.9 percent, to $105.23 a barrel, while US West Texas Intermediate (WTI) crude increased 20 cents, or 0.2 percent, to $92.61. Earlier in the session, oil prices had climbed by more than $4 a barrel after President Donald Trump rejected an Iranian proposal that will reopen the Strait of Hormuz.
According to the Petroleum Division notification, the government continues to levy Rs114 per litre in taxes and duties on petrol and Rs100 per litre on diesel.
The latest reduction brings HSD down from its peak of Rs520.35 per litre recorded on April 3. Its price had risen from Rs281 per litre after the US-Iran war broke out on February 28. Petrol had also reached a peak of Rs458.41 per litre on April 3 after rising from Rs266 in the first week of March.
Amid changes in global oil prices, the government has also reintroduced fuel-conservation measures, under which markets are required to close by 9pm while fuel allocations for official vehicles have been reduced by 50 percent for three months.
Prime Minister (PM) Shehbaz Sharif announced a relief scheme on Sept 13 for users of motorcycles, autos and vehicles of up to 800cc in response to rising global oil prices.
The government had previously shifted to daily fuel-price revisions. Petroleum Minister Ali Pervaiz Malik announced on July 17 that prices will be fixed daily due to fluctuations in international market prices following renewed hostilities between Iran and the US.
The minister said that the cabinet and prime minister had decided to give the Oil and Gas Regulatory Authority (Ogra) responsibility for deciding fuel prices each day based on international market trends.
Petrol is mainly used in private transport, small vehicles, rickshaws and two-wheelers, while HSD is used mainly by the heavy transport sector, power plants and large generators.
Petrol and HSD are also the major revenue earners, with monthly sales of around 700,000 to 800,000 tonnes, compared with about 10,000 tonnes of monthly kerosene demand.
