In a welcome relief for consumers, the prices of all petroleum products are expected to decrease significantly in the next fortnight, starting Saturday and ending February 28. According to informed sources, petrol prices are estimated to drop by Rs2-2.50 per litre, while high-speed diesel (HSD) could see a substantial reduction of Rs9 per litre. Kerosene and light diesel oil (LDO) prices are also projected to fall by Rs3.45 to Rs5 per litre.
This price adjustment comes as a result of declining international market prices, which have directly impacted the ex-depot costs of petroleum products in the domestic market.
Key Highlights of the Price Reduction
- Petrol: Expected to decrease by Rs2.50 per litre (current ex-depot price: Rs257.13 per litre).
- High-Speed Diesel (HSD): Estimated to drop by Rs9 per litre (current ex-depot price: Rs267.95 per litre).
- Kerosene: Likely to fall by Rs3.50 per litre (official rate: Rs174.85 per litre, though market prices range between Rs300-350 per litre).
- Light Diesel Oil (LDO): Projected to decrease by Rs5 per litre.
Why Are Prices Falling?
The reduction in petroleum prices is primarily driven by a decline in international market rates. Over the last fortnight, benchmark Brent crude prices dropped by 2perbarrel∗∗,whiletheaveragepriceofHSDdecreasedby∗∗2perbarrel∗∗,whiletheaveragepriceofHSDdecreasedby∗∗3 per barrel. Petrol prices in the international market also fell by 90 cents per barrel.
Additionally, the import premium on petrol decreased from 8.8to8.8to7.75 per barrel, further contributing to the price drop. Diesel import premiums, however, remained unchanged.
Impact on Consumers and the Economy
1. Petrol
Petrol is widely used in private transport, including cars, motorcycles, and rickshaws. A reduction in petrol prices will provide much-needed relief to middle- and lower-middle-class households, easing their transportation budgets.
2. High-Speed Diesel (HSD)
HSD is the backbone of the transport and agricultural sectors. It powers heavy vehicles like trucks, buses, and tractors, as well as agricultural equipment such as tube wells and threshers. A drop in HSD prices is expected to have a deflationary effect, potentially lowering the costs of essential goods like vegetables and other food items.
3. Kerosene and LDO
Kerosene is a crucial fuel for low-income households, particularly in rural areas, where it is used for cooking and lighting. The reduction in kerosene prices will help alleviate the financial burden on these communities.
Current vs. Revised Prices
| Product | Current Price (Rs/Litre) | Estimated Reduction (Rs/Litre) | Revised Price (Rs/Litre) |
|---|---|---|---|
| Petrol | 257.13 | 2.50 | 254.63 |
| High-Speed Diesel | 267.95 | 9.00 | 258.95 |
| Kerosene | 174.85 | 3.50 | 171.35 |
| Light Diesel Oil | – | 5.00 | – |
What Does This Mean for the Future?
The reduction in petroleum prices is a positive development for both consumers and the economy. Lower fuel costs can lead to:
- Reduced inflation: As transportation costs decrease, the prices of goods and services may also drop.
- Increased disposable income: Households will have more money to spend on other essentials.
- Boost to agriculture: Farmers will benefit from lower diesel costs, reducing the overall cost of production.
However, the global oil market remains volatile, and future price adjustments will depend on international trends and geopolitical factors.
The estimated reduction in petroleum prices is a significant step toward easing the financial burden on consumers and stabilizing the economy. With petrol prices dropping by Rs2.50 per litre and diesel by Rs9 per litre, the move is expected to have a ripple effect across various sectors, from transportation to agriculture.
Stay tuned for official announcements on February 15, when the final prices will be confirmed.
FAQs
1. When will the new petroleum prices take effect?
The revised prices are expected to take effect from Saturday and will remain in place until February 28.
2. Why are petroleum prices decreasing?
The drop is due to a decline in international market prices and reduced import premiums.
3. How will this impact inflation?
Lower diesel prices are likely to reduce transportation and production costs, potentially lowering inflation.
4. What is the current price of kerosene?
The official price is Rs174.85 per litre, but it is often sold at Rs300-350 per litre in the market.