The government is expected to keep domestic oil prices unchanged starting May 1, 2025. This move comes as international oil markets show only minor changes.
For Premium Motor Gasoline (PMG), a very small price drop is expected. The price may go down by Rs 0.16 per litre, which is a 0.1% decrease. This change applies to both the ex-refinery and ex-depot levels.
High-Speed Diesel (HSD), which is widely used in transport and agriculture, will likely remain steady. It might see an increase of just Rs 0.01 per litre. Since diesel has a direct effect on inflation, keeping its price stable brings some relief.
On the other hand, prices of Kerosene and Light Diesel Oil (LDO) may go up. Kerosene is expected to rise by Rs1.30 per litre, which is a 0.9% increase. LDO might increase by Rs1.35 per litre, showing a 1.0% hike.
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These price changes are based on existing tax rates, the Inland Freight Equalisation Margin (IFEM), and there is no US dollar exchange rate adjustment added at the moment.
As of now, the PMG premium is recorded at $5.464 per barrel. This figure might change slightly as two more days of Platts data are still to be added to the calculation.
The government’s pricing decision is based on current oil pricing mechanisms and internal calculations. It aims to strike a balance between rising costs and public relief. Although the drop in PMG is very small, and HSD is nearly unchanged, the decision not to raise prices significantly comes as a stabilising measure. For diesel, particularly, the steady rate helps keep transportation and agriculture costs in check, which indirectly supports inflation control.
This pricing structure reflects current market trends and local factors influencing fuel costs. While Kerosene and LDO see slight increases, the overall strategy seems to focus on maintaining price stability for essential fuels like PMG and HSD.
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