Expected government actions include passing on the benefits of reduced international prices to consumers, potentially lowering petrol and high-speed diesel (HSD) rates. In the upcoming fortnightly price review on June 15, petrol is projected to decrease by around Rs9 per litre and HSD by Rs5 per litre.
International market fluctuations have led to a decline of approximately $3.75 per barrel for petrol and $2.7 per barrel for HSD in the last two weeks. This follows previous reductions of about $12 and $8 per barrel for petrol and HSD, respectively, over the past fortnights. Despite slight changes in import premiums and stable currency values, the government aims to adjust prices accordingly, considering factors such as inland freight equalisation margin (IFEM) and the Petroleum Development Levy (PDL).
The government, adhering to commitments with the International Monetary Fund, targets increased revenue collection from the PDL. Presently, taxes on petrol and HSD amount to around Rs80 per litre, with customs duty comprising approximately Rs19-20 per litre, despite zero general sales tax on petroleum products.
Petrol and HSD sales significantly contribute to government revenue, while their prices impact inflation rates, particularly affecting the budgets of middle- and lower-middle-class households. HSD, predominantly used in heavy transport and agricultural machinery, further influences prices of essential commodities like vegetables.
