Following two consecutive hikes, the prices of petrol and high-speed diesel (HSD) are projected to decrease by approximately Rs3 and Rs8.50 per litre, respectively, from August 1 for the next fortnight. This reduction is primarily attributed to a decrease in the international market prices and import premiums. Sources indicate that in the last fortnight, the international market prices of petrol and HSD have fallen by around $2 and $3 per barrel, respectively.
Based on current tax rates and final calculations, petrol prices are expected to drop by Rs2.90 per litre and HSD by Rs8.50 per litre. The average price of petrol in the international market has decreased from $89.50 to $87.50 per barrel, while HSD has declined from about $96.93 to $94 per barrel.
The import premium has also seen a decline, dropping to $8.80 from $9 per barrel for petrol and to $5 from $6.50 per barrel for HSD. The exchange rate has remained relatively stable during this period.
Despite these reductions, the government has increased the petroleum levy to Rs70 per litre, aiming to collect Rs1.28 trillion in the upcoming fiscal year, up from Rs960 billion in the previous year. Consequently, even with the expected price cuts, petrol will likely remain above Rs272 per litre and HSD close to Rs275 per litre unless there are changes in the petroleum levy rates.
Petrol is primarily used by private transport, small vehicles, rickshaws, and two-wheelers, directly affecting the middle- and lower-middle-class budgets. Conversely, HSD is crucial for the transport sector, used in heavy vehicles like trains, trucks, and buses, significantly influencing the prices of goods and commodities. Although a drop in petroleum prices rarely translates to lower fares and commodity prices, any reduction offers some relief to consumers.
In the current month, petrol and diesel prices have cumulatively risen by Rs17.44 and Rs15.74 per litre, respectively. However, between May 1 and June 15, prices were reduced by about Rs35 and Rs22 per litre, respectively.
