Petrol and high-speed diesel (HSD) prices are expected to rise by Rs4-5 per litre from November 16 for the second half of the month. This increase is due to higher international prices and the import premium on petrol.
Sources indicate that international prices for petrol and HSD increased by approximately $1.7 and $4.4 per barrel, respectively, in the last fortnight. The import premium for petrol also rose to nearly $1 per barrel. Based on exchange rate fluctuations and current tax rates, petrol and HSD prices are projected to increase by up to Rs4 and Rs5 per litre, respectively.
Currently, the ex-depot price for petrol is Rs248.38 per litre, while HSD is Rs255.14 per litre. On October 31, the government raised prices for both petrol and HSD by Rs3.85 and Rs1.35 per litre, respectively.
Petrol is primarily used in private vehicles, small transport, rickshaws, and two-wheelers, significantly impacting the budgets of the middle and lower classes. On the other hand, HSD powers much of the transport sector, including heavy vehicles, trains, and agricultural machinery.
The government currently charges approximately Rs76 per litre in taxes on both petrol and HSD. Although the general sales tax (GST) is zero on petroleum products, a Rs60 per litre petroleum development levy (PDL) is imposed on both products, which burdens the masses. Additionally, the government imposes about Rs16 per litre in customs duties on petrol and HSD, regardless of whether the products are locally produced or imported. Oil companies and dealers also receive around Rs17 per litre in distribution and sales margins.
Petrol and HSD are the primary sources of government revenue, with monthly sales averaging 700,000-800,000 tonnes compared to a mere 10,000 tonnes of kerosene.
