Experts predict reduction in prices of petrol, diesel

According to oil price forecasts from energy experts, the price of petrol is likely to go down by Rs7.50 per litre, while the price of High-Speed Diesel (HSD) may be reduced by Rs12.37 per litre for the rest of this month.

However, there won’t be a reduction in the price of petrol and high-speed diesel if the government increases the petroleum levy (PL) and corrects the backlog of exchange loss on a free-on-board (FOB) basis, according to Brecorder.

Sources said that the price of petrol is likely to go down by Rs7.50, from Rs224.80 to Rs217.30 per litre, while the price of HSD is expected to slide by Rs12.37, from Rs235.30 to Rs222.93 per litre.

The government is also poised to raise the tax on HSD, Superior Kerosene Oil (SKO), and Light Diesel Oil, according to sources in the Petroleum Division (LDO).

It is also possible that the exchange loss arrears in fuel prices would be adjusted.

There are lower prospects of the price of gasoline and HSD decreasing if the government raises the PL and corrects the exchange loss arrears. When petroleum goods reach the maximum level for PL, which is Rs50 per litre on each petroleum product, the government has promised the International Monetary Fund (IMF) that it will apply general sale tax (GST).

Currently, the government is charging a petroleum levy of Rs50 per litre on petrol, Rs25 per litre on HSD, Rs7.01 per litre on SKO and Rs15.39 per litre on LDO.

The government, however, has promised the international lender that it will hike the levy on diesel to Rs50 by April 2023.