The caretaker government announced a substantial increase in petrol prices, effective from February 1. The price of petrol has surged by Rs13.55 per litre, reaching a new high of Rs272.89/litre. Simultaneously, the price of high-speed diesel (HSD) witnessed an uptick of Rs2.75 per litre, with the new rate now standing at Rs278.96 per litre.
Earlier speculations suggested that petroleum product prices might experience a considerable surge due to changes in the international oil market and concerns related to oil imports. Reports had indicated a potential increase of up to Rs9 per litre for petrol and Rs6 for diesel.
Internationally, oil prices faced downward pressure on Wednesday, influenced by sluggish economic activity in China, a major crude importer. The unexpected build in US crude inventories, as production rebounded following severe weather conditions in the previous month, also contributed to the drop in oil prices.
According to Reuters, the US Energy Information Administration reported a 1.2 million barrel increase in weekly crude inventories, contrary to analysts’ expectations of a 217,000 barrel draw. This data further impacted oil prices negatively.
Brent crude futures for March, expiring on the same day, experienced a decline of $1.13 (approximately 1.4%), settling at $81.74 per barrel. The more actively traded April contract displayed a sharper drop, decreasing by $1.92 (about 2.3%) to $80.58. US West Texas Intermediate crude futures lost $1.95 (roughly 2.5%), closing at $75.87.
The government’s decision to raise petrol prices domestically reflects the complex interplay of international oil market dynamics and local economic considerations. As global oil prices continue to exhibit volatility, consumers brace themselves for the potential impact on their daily lives.
