Govt slashes petrol, diesel prices by Rs5 per litre for next week

The government on Friday slashed the price of petrol and high-speed diesel (HSD) by Rs5 per litre each for the next week.

In a notification issued on Friday, the Petroleum Division said new fuel rates will come into effect from May 16.

Following the decrease, the price of petrol stands at Rs409.78 per litre and HSD at Rs409.58.

In the previous weekly review, the government raised the price of petrol by Rs14.92 per litre and HSD by Rs15.

The government has been reviewing petroleum prices on a weekly basis since the US-Israeli conflict with Iran on February 28.

The conflict also triggered a global fuel crunch after the closure of the Strait of Hormuz, a key route through which around one-fifth of the world’s oil and gas supplies pass during peacetime.

Global oil prices gained more than 3% on Friday, climbing more than $3 a barrel, after comments by US President Donald Trump and Iran’s foreign minister further dented hopes of a deal to end ship attacks and seizures around the Strait of Hormuz.

Brent crude futures gained $3.35, or 3.17%, to $109.07 a barrel by 1734 GMT. US West Texas Intermediate futures were up $3.85, or 3.81%, at $105.02.

Over the week, Brent has climbed 7.72% and WTI 10.11% on uncertainty over the shaky ceasefire in the Iran war.

Petrol is mainly used by commuters in small vehicles, rickshaws and two-wheelers. Higher fuel prices significantly impact the budgets of middle and lower-middle-class households, who rely on petrol for daily travel.

On the other hand, a significant portion of the transport sector relies on high-speed diesel.

Its price is considered inflationary since it is predominantly used in heavy goods transport vehicles, trucks, buses, trains, and agricultural machinery such as tractors, tube wells, and threshers.

The consumption of high-speed diesel particularly contributes to the increased prices of vegetables and other food items.