As of February 16, get ready for higher prices on petrol and diesel. This increase is happening because of two main reasons: changes in how money values are compared (exchange rates) and more problems in the Red Sea. This article will look closely at these reasons to help you understand why fuel prices are going up.
Exchange Rate Changes and How They Affect Fuel Prices:
The government says that without the exchange rate adjustment, petrol prices will go up by Rs1.97 per liter, reaching Rs274.86 per liter from Rs272.89. Diesel prices might also increase by Rs9.20 per liter, going from Rs278.96 to Rs288.16 per liter. Kerosene prices could go up by Rs1.57 per liter, going from Rs186.62 to Rs188.19 per liter. The price of Light Diesel Oil (LDO) is expected to increase by Rs3.73 per liter, changing from Rs168.86 to Rs170.59 per liter.
Global Situations and Extra Costs on Fuel:
On the world stage, petrol has an extra cost of $9.43 per barrel, and high-speed diesel has an extra cost of $6.50 per barrel because of problems with ships in the Red Sea. This means the price of petrol from the refinery is predicted to go up to Rs191.44 per liter from Rs189.47 per liter. The new refinery prices for diesel, kerosene oil, and LDO are Rs207.76 per liter, Rs177.80 per liter, and Rs164.14 per liter, respectively.
| Fuel Price Statistics | ||
| Fuel Type | Before (Rs/L) | After (Rs/L) |
| Petrol | 272.89 | 274.86 (↑ 1.97) |
| Diesel | 278.96 | 288.16 (↑ 9.20) |
| Kerosene | 186.62 | 188.19 (↑ 1.57) |
| L.Diesel Oil | 168.86 | 170.59 (↑ 3.73) |
| Global Dynamics and Prices | ||
| Fuel Type | Ex-Refinery Price | Premium per Barrel |
| Petrol | 191.44 (↑ 1.97) | $9.43 |
| Diesel | 207.76 (↑ 9.20) | $6.50 |
| Kerosene | 177.80 (↑ 1.57) | – |
| L.Diesel Oil | 164.14 (↑ 3.73) | – |
| Breakdown of Additional Charges | ||
| Charge Type | Petrol | High-Speed Diesel |
| PDL (Rs/L) | 60 | 60 |
| IFEM (Rs/L) | 5.69 | 4.24 |
| OMCs Margin (Rs/L) | 7.87 | 7.87 |
| Dealers’ Margin (Rs/L) | 8.64 | 8.64 |
Breaking Down Extra Charges:
Right now, the government adds Rs60 per liter as a petroleum development levy (PDL) on both petrol and diesel. On top of that, people have to pay Rs5.69 per liter as Internal Freight Equalization Margin (IFEM) for petrol, along with Rs7.87 per liter as OMCs margin, and Rs8.64 per liter as dealers’ margin. For high-speed diesel users, there’s an extra charge of Rs4.24 per liter as IFEM, plus Rs7.87 per liter as OMCs margin, and Rs8.64 per liter as dealers’ margin.
Conclusion:
In summary, the expected increase in fuel prices is a complex issue, affected by changes in money values, global problems, and a complicated system of extra charges. As prices go up, it’s important for everyone to understand these factors. Stay informed and be ready for changes in fuel prices.
