Big Savings Ahead, Fuel Prices Set to Drop This February

Petroleum product prices are expected to drop in the latter half of February 2025. According to industry experts, the price of petrol could fall by around Rs. 2.49 per litre, bringing the price to Rs. 254.64 from Rs. 257.13. High-Speed Diesel (HSD) is set for a larger price cut of Rs. 9.11 per litre, with the new rate expected to be Rs. 258.84, down from Rs. 267.95.

Along with petrol and diesel, kerosene oil is anticipated to decrease by Rs. 3.45 per litre, reducing its cost from Rs. 174.85 to Rs. 171.40. Similarly, Light Diesel Oil (LDO) will likely see a Rs. 5.60 per litre reduction, lowering its price from Rs. 161.06 to Rs. 155.46.

These price drops are expected to offer significant relief to consumers, especially in rural regions, where kerosene and LDO are commonly used for heating and farming.

The price cuts are being attributed to a fall in ex-refinery prices, driven by global oil market trends. Petrol’s ex-refinery price is expected to decrease from Rs. 176.25 to Rs. 173.76 per litre, while diesel’s price could drop from Rs. 188.72 to Rs. 179.61.

The government plays a role in determining local fuel prices by factoring in taxes and the Inland Freight Equalization Margin (IFEM), which helps standardize prices across the country by accounting for transportation costs. The IFEM covers transport expenses for refineries and Oil Marketing Companies (OMCs).

Additionally, other premiums, like the Premier Motor Gasoline (PMG) premium, are also factored into the final pricing. As the Platts pricing assessment period nears its end, further shifts could impact these numbers.

This expected reduction in fuel prices could have a positive impact on sectors like transportation and agriculture, where diesel is widely used. The lower fuel costs may lead to decreased transport expenses, potentially reducing prices for essential goods and services.

That said, these anticipated cuts remain subject to shifts in international oil prices and government policies. The final prices will be confirmed after a detailed government review.