Prices for major petroleum products, including petrol and high-speed diesel (HSD), are anticipated to decrease by Rs2 to Rs3 per litre starting November 1, 2024, following a slight reduction in global prices.
Sources indicate that the average international prices for petrol and HSD have dropped by approximately $1.5 and $2.5 per barrel, respectively, over the past two weeks. Based on final calculations of the exchange rate and current tax rates, petrol prices are projected to decrease by Rs3 per litre, while HSD prices are expected to fall by Rs2.30 per litre.
Recent data reveals that the average price of petrol in the international market has decreased to around $76 per barrel, down from $77.5, while HSD prices have declined to approximately $84 per barrel from $86.5. During this period, the import premium for petrol and HSD remained relatively stable at $8.7 and $5 per barrel, respectively, with the exchange rate holding steady.
Currently, the ex-depot price for petrol stands at Rs243.03 per litre, while HSD is priced at Rs251.29 per litre. Earlier this month, on October 15, the government raised diesel prices by Rs5 per litre, while keeping petrol rates unchanged at Rs247.03 until the end of October. This marked the first increase in petroleum prices in three months, following a trend of declines attributed to falling international rates.
Petrol is primarily used in private transport, including small vehicles, rickshaws, and two-wheelers, which significantly affects the budgets of middle- and lower-middle-class households. Conversely, HSD is mainly utilized in the transport sector, particularly in heavy vehicles, trains, and agricultural machinery, contributing to inflation as it influences the prices of essential goods, including vegetables.
The government currently imposes approximately Rs76 per litre in taxes on both petrol and HSD, which includes Rs60 per litre in Petroleum Development Levy (PDL) and Rs16 per litre in customs duty. Additionally, around Rs17 per litre is allocated for distribution and sales margins for oil companies and their dealers.
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