Common man finally gets some relief.

ISLAMABAD -- The federal caretaker government has made a substantial reduction in petrol prices, cutting them by up to Rs40 per liter, providing the much-needed relief to the people who have borne the brunt of a challenging economic crisis since mid-2022.

The price of petrol has been reduced from Rs323.38 per liter to Rs283.38 per liter, effective from today, October 16. This reduction is in line with fluctuations in global oil prices and the strengthening of the Pakistani rupee against the US dollar.

Petrol is predominantly used in motorbikes and cars as an alternative to compressed natural gas (CNG), especially in the Punjab province where indigenous gas is not available at CNG retail outlets.

Liquefied natural gas (LNG) is used in CNG retail outlets in Punjab, but for the past couple of years, LNG has been unavailable due to the failure of Pakistan Petroleum Limited (PPL) to import it.

The private sector has struggled to import LNG since 2015, but gas utilities have thwarted these efforts, seemingly to maintain their monopoly.

The government has also reduced the price of high-speed diesel (HSD) by Rs15 per liter, bringing it down from Rs318.18 to Rs303.18 per liter. HSD is primarily used in the agriculture and transport sectors, and this price reduction may help alleviate inflation to some extent.

The price of kerosene oil, whose consumption increases significantly during winters in remote areas, has been reduced to Rs214.85 per liter, marking a Rs22.43 reduction per liter.

Kerosene oil is commonly used in stoves, particularly in remote areas, including the northern regions of the country. The Pakistan Army is also a major consumer of kerosene oil.

The government has increased the petroleum levy by Rs5 per liter on HSD, raising it from Rs50 to Rs55 per liter. A petroleum levy of Rs60 per liter is charged on petrol.

Read more: Petrol, diesel witness massive price hikes

However, the government imposes zero sales tax on these two petroleum products. Sales tax revenue goes to the provinces, while petroleum levy revenue is collected by the...