The government has officially announced a hike in the prices of petrol and High-Speed Diesel (HSD). This petrol and diesel price revision comes after recommendations from the Oil and Gas Regulatory Authority (Ogra) and reflects recent price movements in the international market. These new rates apply immediately and will remain effective until the end of February.
New Petrol & Diesel Prices Breakdown
The Petroleum Division released the notification late Sunday night. High-Speed Diesel (HSD) witnessed the sharpest increase. The government raised the ex-depot price of HSD by Rs. 7.32 per litre, a 2.7% jump. Consequently, the new price is Rs. 275.70 per litre, up from Rs. 268.38.
Simultaneously, petrol prices increased by Rs. 5 per litre, marking a 2% rise. The price has moved from Rs. 253.17 to Rs. 258.17 per litre.
Impact on Inflation & Commuters
This price surge will likely ripple through the economy. The transport sector relies heavily on HSD. Trucks, buses, trains, and agricultural engines—such as tractors, tube-wells, and threshers—all run on diesel. Therefore, experts consider HSD prices inflationary, as they directly increase the cost of transporting vegetables and other eatables.
In contrast, petrol primarily fuels private vehicles, rickshaws, and two-wheelers. As a result, this hike directly impacts the monthly budgets of the middle and lower-middle classes.
Taxes, Levies & Margins
While the General Sales Tax (GST) remains zero on petroleum products, the government still collects significant revenue through other charges. Currently, the state charges approximately Rs. 105 per litre on petrol and Rs. 97 per litre on diesel.
Key components of this pricing structure include:
- Petroleum Levy: The government charges Rs. 87 per litre on petrol and Rs. 79 per litre on diesel. This includes a Rs. 2.50 Climate Support Levy (CSL).
- Custom Duty: Roughly Rs. 17-18 per litre is charged on imports and local production.
- Margins: Oil companies and dealers receive distribution margins of about Rs. 17 per litre.
Petrol and diesel remain major revenue spinners, with monthly sales averaging between 700,000 and 800,000 tonnes. The government recovered Rs. 1.161 trillion via the petroleum levy in FY2025 and targets Rs. 1.470 trillion for the current fiscal year, a projected 27% increase.
