Petrol Price Likely to Increase by Rs. 4 From March 1
After reducing petrol price by Rs. 1 in the middle of this month, the federal government is likely to announce a jump of Rs. 4 to Rs. 4.50 per litre, while diesel rates may experience a slight decrease of less than a rupee per litre from March 1, 2025. These adjustments are primarily influenced by global market fluctuations and exchange rate shifts.
The Reason
The projected hike in petrol prices is attributed to a moderate increase in international fuel rates coupled with a weaker exchange rate against the dollar. Over the past ten days, Brent crude prices have shown stability, yet minor variations have led to adjustments in local fuel costs.
If this anticipation comes true, new petrol price will lie at Rs. 260.13 compared to current Rs. 256.13. The existing price of high-speed and kerosene oil is Rs. 263.95 and Rs. 171.65 per litre, respectively.
As of now, the ex-depot price for petrol stands at Rs. 256.13 per litre, while high-speed diesel (HSD) is priced at Rs. 263.95 per litre. Kerosene, although officially set at Rs. 171.65 per litre, is often sold at a significantly higher price, ranging between Rs300 and Rs350 per litre in the market.
Taxation & Revenue
Despite the absence of General Sales Tax (GST) on petroleum products, the government imposes significant levies. A petroleum development levy of Rs. 60 per litre is applied to both petrol and diesel, contributing to the overall burden on consumers. Additionally, customs duties of around Rs16 per litre and distribution margins of Rs17 per litre further inflate the prices.
Luxury vehicle owners using high-octane petrol (95RON) or light diesel are subject to even higher levies, reaching Rs. 50 per litre. Given that petrol and diesel contribute significantly to government revenue—selling around 700,000 to 800,000 tonnes monthly—these taxes play a crucial role in fiscal policies. In contrast, kerosene demand remains much lower at approximately 10,000 tonnes per month.
What do you think about the anticipation translating a rise in petrol price? Tell us in the comments section.