Rs3.9 per litre reduction in diesel price likely
Market talk suggests that the significant increase in demand for diesel partly stemmed from control over fuel smuggling from neighbouring Iran. photo: file
The price of high-speed diesel may go down by Rs3.90 per litre effective from December 16 in line with fluctuations in the global oil market.
Diesel is mainly used in transport and agriculture sectors and the reduction will have a disinflationary impact on consumers.
However, the price of petrol is anticipated to be increased by 81 paisa per litre when the government announces its fortnightly rate revision on December 15.
The inland freight equalisation margin for petrol and high-speed diesel is projected at Rs7.92 and Rs4.15 per litre, respectively.
If the petrol price goes up by 81 paisa, it will reach Rs252.91 per litre. Petrol is mainly consumed in motorcycles and passenger cars. The price of high-speed diesel, however, is expected to fall from Rs258.43 to Rs254.53 per litre, a decrease of Rs3.90.
The price of kerosene oil, primarily consumed for cooking and heating purposes in far-off areas, may be slashed by Rs3.97 to Rs161.01 per litre. Similarly, light diesel oil, which is mainly used in industries, is likely to cost Rs3.55 per litre lower at Rs148.18.
In the international market, the premium for petrol has settled at $8.84 per barrel as compared to $9.80 in the previous review, which ended on November 30.
The reduction in petroleum product prices could lead to an increase in their consumption, which will help the government to meet its monthly target for the petroleum levy collection.
Petroleum levy receipts climbed to Rs110 billion in November, reflecting a 19% year-on-year rise.