High-speed diesel, petrol and kerosene prices are likely to increase by up to Rs 6 per liter due to rising prices in the global market.
Informed sources said that the price of ex-depot petrol is estimated to increase by Rs 5 to 6 per liter, depending on the final calculation on January 15, while kerosene and diesel prices are likely to increase by Rs 3 and Rs 2 per liter, respectively.
The increase in petroleum product prices was estimated after US President-elect Donald Trump returned to the international market last week after threatening to impose severe sanctions on Russian oil and energy exports. Since then, Brent prices have increased by one to two dollars per barrel.
Sources say that during the last 15 days, the average prices of HSD and petrol in the international market increased slightly, while the ex-refinery price of kerosene also increased, there was no change in the import premium on petrol and diesel, the exchange rate generally remained stable.
According to the latest estimates, during the next 15 days, the price of petrol may increase by Rs 5.50 to Rs 6.50, the price of high-speed diesel by Rs 2.50 and the price of kerosene by Rs 4 per liter.
An OGRA official said that the increase in the price of diesel can be adjusted within the Inland Freight Equalization Margin (IFEM).
Ex-depot petrol is priced at Rs 252.66 and diesel at Rs 258.34 per litre, the official price of kerosene is Rs 162.95. On December 31, the government had increased the prices of petrol and diesel by Rs 56 and Rs 2.96 per litre respectively.
Petrol is mainly used in private transport, small vehicles, rickshaws and two-wheelers, and it directly affects the budget of the middle and lower middle class. Most of the transport sector runs on HSD. Its price is considered inflationary, as it is mostly used in heavy transport vehicles, trains and agricultural engines such as trucks, buses, tractors, tube wells and threshers, which increases the prices of vegetables and other food items.
The government is collecting about Rs 76 per litre in tax on petrol and HSD, although the General Sales Tax (GST) on all petroleum products is zero, but the government collects a Petroleum Development Levy of Rs 60 per litre on both products, which generally affects the public.
The government collects about Rs 16 per litre in customs duty on petrol and HSD, irrespective of whether they are locally produced or imported. In addition, about Rs 17 per litre in distribution and sales margin is collected by oil companies and their dealers on both products.
On the other hand, Rs 50 per litre is collected on light diesel and high-octane blending components and 95-RON petrol used by the rich in luxury imported vehicles. The government collects about Rs 16 per litre in customs duty on petrol and HSD, irrespective of whether they are locally produced or imported.
In addition, oil companies and their dealers charge a distribution and sales margin of approximately Rs. 17 per liter on both products.
