Following a substantial decline in the global market, consumers can expect a considerable decrease in petrol and high-speed diesel (HSD) prices by approximately Rs15 and Rs9 per litre respectively, starting May 15, despite a rise in import premiums.
Insiders revealed that over the last two weeks, petrol and HSD prices have witnessed a downturn in the international market, with decreases of about $8.7 and $4.3 per barrel respectively. Depending on the final calculation of the inland freight equalisation margin (IFEM), it is anticipated that petrol prices could see a reduction of Rs14.75 per litre and HSD by Rs8.50 per litre.
The import premium on petrol surged by over 7 per cent in the same period to $10.30 per barrel. However, the rupee experienced a modest gain of about 20 paise against the dollar during this time. As a result, it’s projected that petrol prices could drop by approximately Rs15 per litre from the current rate of Rs288.49.
Meanwhile, the HSD price also saw a decline of $4.3 per barrel internationally, with the import premium remaining steady at $6.50 per barrel. Consequently, the HSD rate is estimated to decrease by Rs8.50-9.40 per litre, contingent upon the final exchange rate adjustment and IFEM in pricing.
Officials noted that the international market price of petrol decreased from $96.6 to $88 per barrel, while HSD price dropped from $97.5 to $93 per barrel.
This reduction comes after a previous decrease of Rs5.63 and Rs8.42 per litre for petrol and HSD respectively, effective May 1.
The government has already reached the maximum petroleum levy limit of Rs60 per litre, collecting Rs720bn in the first nine months ending March 31, against the budget target of Rs869bn set for the current fiscal year under International Monetary Fund (IMF) commitments.
High petroleum and electricity prices have been driving factors behind unprecedented inflation, affecting the budgets of the middle- and lower-middle class. Petrol, commonly used in private transport and smaller vehicles, along with HSD, primarily used in heavy transport vehicles and agricultural engines, significantly impact the prices of essentials like vegetables.
The government imposes approximately Rs82 per litre tax on petrol and HSD, along with a Rs60 per litre petroleum development levy (PDL) on both products. Additionally, customs duty of about Rs19-20 per litre is charged on petrol and HSD.
Petrol and HSD remain major revenue generators, with monthly sales reaching approximately 700,000–800,000 tonnes, significantly higher than the monthly demand for kerosene, which stands at just 10,000 tonnes.