The prices of high-speed diesel (HSD) and petrol are expected to see a reduction of approximately Rs15-19 per litre for the first half of October. This marks the first decrease in two months, largely attributed to the strengthening of the rupee.
The last reduction in prices for these essential fuels occurred in mid-July, with petrol dropping by Rs9 per litre to Rs253 and diesel by Rs7 per litre to Rs253.50.
Sources suggest that based on current tax rates and other factors, the price of petrol could decrease by Rs15-19 per litre in the upcoming review. This projection takes into account a roughly 2% reduction in its international price from $101 to $99 per barrel and an increase of about Rs10.5 in the rupee’s value against the US dollar.
For high-speed diesel (HSD), its price could potentially decrease by Rs9-12 per litre if the government maintains the petroleum levy at Rs50 per litre. However, if the finance ministry decides to raise the levy by Rs5 per litre to meet budgetary targets, the diesel price could be cut by Rs5-8 per litre.
Unlike petrol, the international market price of HSD has risen by approximately $1 per barrel to $122 in recent weeks. HSD is predominantly used in heavy transport vehicles, buses, trains, and various agricultural machinery, making it an influential factor in the prices of vegetables and other food items.
This marks the first opportunity for the caretaker government to adjust petroleum prices. Between August 15 and September 15, petrol and high-speed diesel prices increased by Rs58.43 and Rs55.83 per litre, respectively. Currently, both products are retailed at Rs331-333 per litre.
Presently, there is a zero GST (Goods and Services Tax) on all petroleum products. However, the government imposes a Rs60 per litre petroleum development levy on petrol, and Rs50 per litre each on HSD and high-octane blending component, as well as 95 RON (Research Octane Number) petrol. Additionally, the government levies around Rs22-23 per litre in customs duty on petrol and HSD.
