In a move that could bring relief to consumers, the government is poised to announce substantial cuts in petroleum prices, effective August 1, 2024. Sources indicate that petrol prices may decrease by Rs 3 per litre, while high-speed diesel (HSD) could see a more significant reduction of approximately Rs 8.50 per litre.
The Oil and Gas Regulatory Authority (OGRA) is preparing to submit a summary to the government detailing these proposed changes. The official announcement is expected at midnight on July 31, 2024.
These potential price reductions reflect recent trends in the global oil market. Over the past two weeks, international petrol prices have fallen by about $2 per barrel, with HSD prices dropping by $3 per barrel. The average price of petrol on the international market has decreased to $87.50 from $89.50 per barrel, while HSD has fallen to $94 from $96.93 per barrel.
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Import premiums have also seen a decline, with petrol premiums decreasing to $8.80 from $9 per barrel, and HSD premiums dropping to $5 from $6.50 per barrel. The exchange rate has remained stable during this period.
Currently, the ex-depot price for petrol stands at Rs 275.60 per litre, with HSD at Rs 284 per litre. Following the proposed adjustments, petrol prices are expected to stabilize above Rs 272 per litre, while HSD could approach Rs 275 per litre.
It’s worth noting that the government has recently increased the maximum petroleum levy to Rs 70 per litre in the current Finance Bill. This move aims to collect Rs 1.28 trillion in the upcoming fiscal year, up from Rs 960 billion collected last year.
Despite these potential price cuts, weekly inflation has seen a slight increase of 0.17 percent. However, the anticipated reductions in petroleum prices may help mitigate inflationary pressures in the coming weeks.
The government’s final decision on these price adjustments will be closely watched by consumers and economists alike, as it could have significant implications for the country’s economic landscape.
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