The prices of high-speed diesel (HSD) and petrol are anticipated to be reduced by approximately Rs5-19 per litre for the period of October 1st to 15th, marking the first decrease in two months. This reduction can be attributed to the appreciation of the rupee.
During the mid-July, the prices of petrol were cut by Rs9 per litre to Rs253, while diesel saw a reduction of Rs7 per litre to Rs253.50.
This estimation is based on the actual impact in the first 12 days of September, with the last two days being taken into consideration. Petrol is primarily used in private transport, small vehicles, rickshaws, and motorcycles, making this decrease in price directly beneficial to the middle- and lower-middle-class individuals.
Similarly, the price of HSD may decrease by Rs9-12 per litre if the government chooses to maintain the petroleum levy at Rs50 per litre. However, in order to meet the budgetary target, if the finance ministry decides to increase the levy by Rs5 per litre, the diesel price will be reduced by Rs5-8 per litre.
In contrast to petrol, the price of HSD in the international market has risen by about $1 per barrel to $122 in recent weeks.
The transport sector relies heavily on this type of diesel. Its price is considered to significantly impact inflation as it is predominantly used in heavy transport vehicles, buses, trains, and agricultural engines such as trucks, tractors, tube wells, and threshers. The fuel price particularly affects the prices of vegetables and other food items.
This presents an opportunity for the caretaker government to reduce petroleum prices. Between August 15th and September 15th, petrol and high-speed diesel prices skyrocketed by Rs58.43 and Rs55.83 per litre, respectively. Currently, both products are being sold at the retail stage for Rs331-333 per litre.
Currently, all petroleum products have a zero GST (Goods and Services Tax), however, the government imposes a petroleum development levy of Rs60 per litre on petrol and Rs50 per litre on HSD and high-octane blending component and 95 RON (Research Octane Number) petrol. Additionally, the government also charges about Rs22-23 per litre as customs duty on petrol and HSD.