Petrol Rates Expected to Decrease by Rs9 Tomorrow

The government is set to pass on the impact of lower international prices to consumers by reducing the rates of petrol and high-speed diesel (HSD).

In the upcoming fortnightly review on June 15, it is anticipated that petrol will decrease by approximately Rs9 per litre and HSD by Rs5 per litre. Sources indicate that international prices for petrol and HSD have dropped by about $3.75 and $2.7 per barrel, respectively, over the last two weeks. This follows previous declines of $12 and $8 per barrel for petrol and HSD in the preceding two fortnights.

Petrol prices have decreased from around $94 to slightly over $90 per barrel, while HSD prices reduced from $98 to $95 per barrel during this period. The import premium on petrol has also slightly decreased from $9.70 to $9.50 per barrel, while the value of the rupee has remained stable.

Taking into account factors like the Inland Freight Equalisation Margin (IFEM), the final consumer price for petrol is expected to decrease by Rs9 per litre and for HSD by Rs5 per litre.

Additionally, the Petroleum Development Levy (PDL), which has already reached its maximum permissible limit of Rs60 per litre under current law for both petrol and HSD, has contributed significantly to government revenue. In the first nine months of the fiscal year, it contributed Rs720 billion against a budget target of Rs869 billion, now revised to Rs960 billion in line with commitments to the International Monetary Fund (IMF).

Currently, the government imposes approximately Rs80 per litre in taxes on both petrol and HSD, including customs duty of about Rs19-20 per litre, despite the general sales tax being zero on all petroleum products.

Petrol and HSD are major revenue sources, with monthly sales ranging from 700,000 to 800,000 tonnes, compared to just 10,000 tonnes for kerosene. These prices significantly impact inflation rates, particularly affecting private transport, small vehicles, rickshaws, two-wheelers, heavy transport vehicles, trains, agricultural machinery, and subsequently, the prices of essential commodities like vegetables.

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