Fuel Price Update. Petrol Set to Rise, HSD Sees Change

From March 1, petrol prices are anticipated to rise by approximately Rs4 to Rs4.50 per litre, while high-speed diesel (HSD) may experience a slight reduction, reflecting global oil price movements and changes in exchange rates.

The final decision will be made on February 28, based on the fluctuations in Brent crude prices and the rupee-dollar exchange rate.

Currently, the ex-depot price of petrol is Rs256.13 per litre, and HSD is priced at Rs263.95 per litre. Despite the official rate of kerosene being Rs171.65 per litre, it is being sold in the market at much higher prices, ranging from Rs300 to Rs350 per litre.

Petrol is primarily used in private vehicles, motorcycles, and smaller transportation, so any increase in its price puts a significant strain on middle and low-income individuals.

Diesel is essential for large transport, agriculture, and railways, meaning any fluctuation in its cost directly influences inflation and the prices of necessary commodities.

Despite keeping the general sales tax (GST) at zero, the government still collects about Rs76 per litre in taxes on both petrol and diesel. This includes a petroleum development levy (PDL) of Rs60 per litre and customs duties amounting to Rs16 per litre. Furthermore, oil marketing companies and dealers impose around Rs17 per litre in profit margins on both fuels.

Consumers of luxury fuels also bear high taxes, as light diesel, high-octane blending agents, and 95RON petrol are subject to a Rs50 per litre petroleum development levy.

Petrol and HSD remain key sources of government revenue, with monthly sales ranging between 700,000 to 800,000 tonnes. In contrast, kerosene consumption is relatively low, around 10,000 tonnes per month.