The federal government on Saturday slashed the price of petrol by Rs1.86 per litre for the next fortnight in line with downward trend in the international market.

The new fuel prices will be effective from September 1, according to an official statement.

The statement said the petrol price has been reduced from Rs260.96 per litre to Rs259.10 per litre.

The government also reduced price of high-speed diesel (HSD) from Rs266.07 per litre to Rs262.75 after a cut of Rs3.32.

The relief in petroleum products prices is the third in a row, with the government reducing petrol price by Rs16.5 since July 30.

In the previous fortnightly review, the government reduced prices of petrol and diesel by Rs8.47 per litre and Rs6.70 per litre, respectively.

Petrol, also called mogas, is mainly used in private transportation, small vehicles, rickshaws, and two-wheelers. Higher fuel prices significantly impact the budgets of the members of the middle and lower-middle classes, who primarily consume petrol for commuting. On the other hand, a significant portion of the transport sector relies on high-speed diesel.

Its price is considered inflationary since it is predominantly used in heavy goods transport vehicles, trucks, buses, trains, and agricultural machinery such as tractors, tube wells, and threshers.

The consumption of high-speed diesel particularly contributes to the increased prices of vegetables and other food items.