The government has lowered the petrol price by Rs1 per litre and high-speed diesel (HSD) by Rs4 per litre for the next two weeks. These fuel price cuts, announced by the Finance Division on Saturday, come as the Oil and Gas Regulatory Authority adjusted prices due to fluctuations in the international oil market.
New Fuel Prices
The revised price of petrol now stands at Rs256.13 per litre, while HSD is priced at Rs263.95 per litre. Light diesel oil (LDO) and super kerosene oil have also been reduced to Rs155.81 and Rs171.65 per litre, respectively, after cuts of Rs5.25 and Rs3.20.
Global Oil Price Impact
The adjustments were driven by a drop in global oil prices. Benchmark Brent crude fell by $2 per barrel in the last fortnight. Diesel prices declined by about $3 per barrel, and petrol prices dropped by 90 cents per barrel. Kerosene and LDO prices also saw a decrease, and the import premium on petrol fell by $1 per barrel, now standing at $7.75.
Initial estimates suggested a Rs9 decrease for HSD, Rs2.50 for petrol, Rs3.50 for kerosene, and Rs5 for LDO. As of February 29, these adjustments were confirmed by updated calculations.
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Price Breakdown
The current ex-depot price for petrol is Rs257.13 per litre, while HSD is Rs267.95 per litre. Kerosene, officially priced at Rs174.85 per litre, is often sold at Rs300-350 per litre in the market.
Impact on the Public
Petrol is commonly used in private vehicles, rickshaws, two-wheelers, and small cars. Any fluctuation in its price directly affects the budgets of middle- and lower-income households. In contrast, HSD powers most of the transport sector, including trucks, buses, trains, tractors, and agricultural engines. Since it plays a crucial role in transporting goods and produce, changes in HSD prices have a direct impact on food prices and inflation.
Inflationary Concerns
Given that HSD fuels heavy transport and agricultural operations, a reduction in its price could provide some relief to consumers by slowing the rise in food prices.
Looking Ahead
As global oil prices continue to fluctuate, further adjustments to local fuel prices may be expected. These changes will remain closely monitored for their impact on household budgets and overall inflation in the country.
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