KARACHI: Pakistan's Finance Minister Ishaq Dar announced the government's decision to slash the price of petrol by Rs12 per liter and High Speed Diesel (HSD) by Rs30 per liter on Monday, saying that the measure was taken to provide "maximum relief" to the masses amid declining prices of petroleum products in the international market.

Fuel and energy prices in Pakistan soared over the past one year as the South Asian country took tough fiscal measures in hopes of reviving a stalled $6.5 billion loan program of the International Monetary Fund (IMF). For a staff-level agreement to take place between the two sides which would unlock $1.1 billion in funds for Pakistan, the IMF asked Islamabad to scrap subsidies worth billions of rupees on fuel and energy, and raise taxes.

Subsequently, inflation increased to a historic high of 36.4 percent in Pakistan in April 2023, the highest since 1964. Weekly inflation reported an increase of 48.2 percent during the week ended on May 11, 2023 on an annual basis, according to the Pakistan Bureau of Statistics.

In a brief televised address, Dar said after the latest price reduction, petrol would cost Rs270 per liter, while HSD, kerosene and Light Diesel Oil would cost Rs258, Rs164.07, and Rs152.68 per liter respectively.    

“Prime Minister Shehbaz Sharif and his government tried to provide maximum relief to the public on the basis of price changes [of petroleum products] in the international market," the finance minister said.

Dar requested transporters and departments utilizing diesel to pass on the impact of the price cut to the public by lowering their fares so that all income segments of the society could benefit from the price reduction. 

The government's move to slash prices of petroleum products also comes at a time when Pakistan's import of petroleum products has decreased by 48% on an annual basis and 22% on a month-on-month basis during April 2023. 

Oil imports declined by 48% to 1.07 million tons during April 2023 as compared to 2.05 million tons during April 2022, according to a research report released by Pakistan's largest securities brokerage company, Arif Habib Limited, on Monday. 

Imports of Mogas, HSD, and crude oil decreased by 24%, 57%, and 43% respectively on an annual basis while RLNG imports also declined by 33% and 11% on an annual and monthly basis to 1.8 million tons during April 2023.