Fuel Price Surge Expected in February, Impact on Consumers and Inflation

Consumers are likely to face a rise in fuel prices as the cost of petrol and high-speed diesel (HSD) is expected to increase during the first half of February.

Industry sources suggest that the ex-refinery price of petrol could go up by Rs1.24 per liter, from Rs173.55 to Rs174.79. HSD prices may see a rise of Rs4.49 per liter, increasing from Rs182.26 to Rs186.75.

Kerosene oil is expected to experience the biggest hike of Rs5.93 per liter, rising from Rs158.83 to Rs164.76, while light diesel oil might go up by Rs5.05 per liter, from Rs151.68 to Rs156.73.

The anticipated increase in refinery prices is expected to also affect ex-depot rates. Petrol at depots could rise from Rs256.13 to Rs257.37 per liter, while diesel prices may increase from Rs260.95 to Rs265.44 per liter. Kerosene oil could rise from Rs169.25 to Rs175.18, and light diesel oil might go up from Rs156.53 to Rs161.58 per liter.

These price changes are mainly driven by government taxes and the Inland Freight Equalization Margin (IFEM), which covers transportation costs across different areas. The current estimates do not account for fluctuations in exchange rates, meaning currency changes are not factored into these predictions.

Additionally, the premium on petrol (PMG) is estimated at $8.84 per barrel for an imported cargo, contributing to the overall pricing structure. These factors collectively influence the anticipated fuel price adjustments.

The final prices will be confirmed after the inclusion of the last day’s Platts data and any adjustments made by the government. If these increases go into effect, it could lead to higher transportation costs and further inflationary pressure