Following a recent increase in global oil prices, as well as a depreciation of the rupee against the US dollar, which has reduced the exchange rate impact by Rs12, the Oil and Gas Regulatory Authority (Ogra) is expected to suggest a price increase for petroleum goods over the next two weeks.
Petrol prices are expected to climb by Rs12 per litre, while diesel prices would jump by Rs14.83 per litre beginning September 1, 2023.
“This would expose the masses to yet another spike in inflation, making their lives even more miserable.” The current inflation rate is 28%,” a senior Energy Ministry official told The News.
“However, the government, which is already under tremendous pressure due to nationwide protests over inflated electricity bills, may reduce or stop the increase,” the official continued.
However, doing so would place the caretaker administration in a difficult position.
“If the government does that, it will be considered that the caretaker government has violated the terms and conditions of the IMF’s $3 billion standby agreement (SBA) loan, under which the government is obligated to pass on price fluctuations in POL products.”
The dollar has touched Rs301.75 in the interbank market and is trading for roughly Rs319 in the open market, according to the official.
According to the report, petrol prices have already risen by Rs37.50 per litre in August, while diesel prices have risen by Rs40 per litre.
“However, the authorities previously calculated POL pricing at the value of the dollar at Rs287, and now they have chosen to calculate POL prices beginning September 1, 2023, at Rs299.
“The significant impact of the Rs12 exchange rate will be reflected in the increase in POL prices.”
“The LC confirmation charges that have increased by 10% are also embedded in the price of PSO petroleum products,” an Energy Ministry official explained.
“The current price of Mogas is Rs290.45 per litre, which may rise by Rs12 per litre to Rs302.45 per litre.” Similarly, the HSD price, which is currently Rs293.40 per litre, is expected to rise by Rs14.83 per litre to Rs308.23 per litre.”
Because diesel is mostly utilised in heavy transport vehicles, railroads, and agricultural engines such as trucks, buses, tractors, tube wells, and threshers, the price of vegetables and other eatables is significantly inflationary.
Petrol, on the other hand, is widely utilised in private transportation, small cars, rickshaws, and two-wheelers, and has a direct impact on the budgets of middle and lower-middle-class residents.