According to a notification issued by ministry of finance on Saturday, the price of High Speed Diesel has also been cut by Rs 5.33 and the new price would be Rs 127.14 per liter to be applicable from Sunday, September 01.

Similarly, the price of kerosene oil was reduced by Rs 4.27 from Rs 103.84 to Rs 99.57 per liter whereas the Light Diesel Oil price had also been decreased by Rs 5.63 to Rs 91.89 per litre.

The ministry of finance stated that prices of petroleum products were determined by Oil and Gas Regulatory Authority (OGRA) using actual orders placed by Pakistan State Oil (PSO) for HSD and Petrol for the last month/period.

Predefined costs like freight, port handling and retailer margins were then added by OGRA. Since three months, the GST had been fixed at 17%, when in the FY 2015-16 it had gone to as high as 71% on HSD, the statement of the ministry added.

The Petroleum Development Levy (PDL) was also fixed, so, any variation in purchase price of PSO over the last imported period is notified by OGRA.

If the international prices show a downward trend, this occurs with 30-40 days, subject to exchange rate movement.

The average purchase price of petrol (inclusive of custom duty) over the last imported period has been Rs 71.89 per liter and that of HSD has been Rs 82.06 per liter prior to taxes and cost of distribution.

After adding taxes and distribution charges in cost of purchasing Petrol and Diesel, over last month, the ex-depot sales prices are fixed at Rs 113.24 per liter and Rs 127.14 per liter respectively.

These prices in term of rupee parity for petrol were significantly lower than regional markets like India (Rs 168.25/liter), Sri Lanka (Rs 144.15/liter), and Bangladesh (Rs 168.79/liter), the statement added.