Projected Fuel Price Hike Due to Modest Rise in International Market

Petrol prices are set to increase by Rs3 per litre, and diesel by Rs2.87 per litre, effective December 1, for the upcoming fortnight. This price adjustment comes after a moderate rise in international fuel prices over the past 12 days, according to sources.

Despite the expected increase in local prices, officials are optimistic about a potential decline in global oil prices starting later this week, following the Israel-Hezbollah ceasefire. This could stabilize the prices of petroleum products (POL) in the coming days.

Over the past fortnight, Brent crude prices rose slightly, settling at $72.83 per barrel, while US West Texas Intermediate dropped by 5 cents, closing at $68.72 per barrel.

Based on current trends, petrol prices are forecasted to rise by Rs3 per litre, which would bring the price to Rs251.38, up from the existing Rs248.38. Similarly, diesel is expected to increase by Rs2.87 per litre, from Rs255.14 to Rs258.01 per litre.

However, there is a slight decrease in prices for kerosene oil and light diesel oil (LDO). Kerosene is projected to drop by Re0.11, bringing the price to Rs165.49 per litre, and LDO may decrease by Re0.04, settling at Rs152.17 per litre.

In the previous fortnightly review, the government opted to maintain petrol and high-speed diesel prices in line with international market trends. The price changes reflect the ongoing volatility of global oil markets.

Petrol is primarily used in private transport, including small vehicles, rickshaws, and two-wheelers. The increase in petrol prices disproportionately affects the middle and lower-middle classes, who rely on it for daily commuting.

Diesel, on the other hand, plays a critical role in the transport sector, with heavy vehicles, trucks, buses, trains, and agricultural machinery heavily dependent on it. As such, diesel price fluctuations have a direct inflationary impact, influencing the cost of goods and services across the economy.