ISLAMABAD: The federal government has increased the petrol price by Rs6.72 and cut high-speed diesel and kerosene rates in the wake of fluctuations in oil cost in the international market and exchange rate variation. The new price of petrol is Rs233.91.

The new prices would be effective from August 16 (today), said the notification issued by the finance ministry. The HSD and SKO prices were reduced by Re0.51 and Rs1.67.

The government is charging a petroleum development levy of Rs20 per litre on petrol and Rs10 each on HSD, kerosene and light diesel oil in line with commitment with the International Monetary fund. The tax was the last prior action set by the global lender for the bailout package.

Later, Pakistan got the letter of intent (the document outlining the general plans of an agreement) from the IMF. The IMF executive board would meet at the end of August when a report of the measures taken by Pakistan would be presented. The board is expected to approve the release of more than $1 billion of the tranche.

The government has also increased the dealers’ margin (a cost incurred by them after import and transportation of fuel) to Rs7.

The coalition government after coming into power had several times hinted at taking “difficult decisions” by increasing the fuel cost from Rs149, which they described as a “landmine” planted by the preceding PTI government.

Since then the government has jacked up the prices in order to get the IMF package and resume the programme. PM Shehbaz-led government has so far increased over Rs84 on fuel price.

Oil prices settled lower on Monday after disappointing Chinese economic data renewed concerns of a global recession that would be expected to reduce fuel demand, Reuters reported.

Brent crude futures settled down $3.05, or 3.1%, to $95.10 a barrel after dropping 1.5% on Friday.

US West Texas Intermediate crude settled down $2.68, or 2.9%, at $89.41 after dropping 2.4% in the previous session. Brent futures were close to their lowest since before Russia sent troops into Ukraine on Feb 24, while WTI futures touched their lowest on Monday since early February.