The government has taken a much-needed step to alleviate the burden on citizens by reducing the prices of petrol and high-speed diesel (HSD) for the next fortnight. The Government slashes petrol prices move comes as a response to the decreasing trend in international petroleum prices over the last 15 days.
In a notification issued by the finance ministry, it was announced that the price of petrol has been decreased by Rs15.39 per litre, bringing it down to Rs273.1 per litre. Simultaneously, the price of HSD has been slashed by Rs7.88 per litre, with the new rate set at Rs274.08.
Government Slashes Petrol Prices, Reason?
Sources familiar with the matter revealed that the international market witnessed a decline in petrol and HSD prices by approximately $8.7 and $4.3 per barrel, respectively, during the last fortnight. Despite this reduction, the import premium on petrol increased by more than seven per cent to $10.30 per barrel.
The government has already reached the maximum permissible limit for the petroleum development levy (PDL) at Rs60 per litre on petrol and HSD, collecting a substantial Rs720 billion in the first nine months of the fiscal year. Taxation on petrol and HSD remains vital, with about Rs82 per litre charged in taxes; moreover, the government imposes Rs60 per litre PDL on both products, contributing to its revenue stream.
Impact on Inflation
High petroleum prices have been a leading cause of inflation, affecting the budgets of middle- and lower-middle-class households, particularly those reliant on private transport and two-wheelers. The reduction in petrol prices offers relief to these segments of society, easing their financial burdens amid rising living costs.
Rising petroleum and electricity costs have been primary drivers of inflation, contributing majorly to the current economic challenges. Petrol, primarily utilized in private transportation, small vehicles, rickshaws, and motorcycles, directly impacts the financial constraints of middle- and lower-middle-class households.
Read more: Government Hikes Petrol Price, Diesel Surges
