Petrol and high-speed diesel prices are set to decrease, potentially falling below Rs300 per litre, due to global oil price reductions and the strengthening of the rupee. Predictions show that petrol may decrease up to Rs38 per litre, while high-speed diesel may decrease up to Rs20 per litre.
However, the final decision lies with the caretaker government, especially concerning high-speed diesel, which currently has a petroleum development levy of Rs50 per litre, compared to petrol’s Rs60. This price drop, if confirmed, would mark the second consecutive reduction by the caretaker government, following three prior increases. From August 15 to September 15, fuel prices saw significant hikes, with petrol and high-speed diesel increasing by Rs58.43 and Rs55.83 per litre, respectively.
Potential Impact on Inflation
The persistent high prices of petrol and diesel, which have remained above Rs300 per litre since September 1, combined with escalating electricity costs, have been primary contributors to soaring consumer prices. As a result, inflation skyrocketed to 31.4% in September. The anticipated reduction in fuel prices could potentially curb this inflationary momentum.
Insider sources hint that, given the current tax rates and overheads, the petrol price may decrease by around Rs36-38 per litre due to a significant 12% drop in global price and a 4% appreciation of the rupee against the US dollar. Conversely, while the global price of high-speed diesel has also fallen, the potential price reduction depends largely on government decisions related to the petroleum levy.