The government reduced the petrol price on Saturday by Re1 per litre for the next fortnight and that of high-speed diesel by Rs4.

A press release from the Finance Division said the decision was taken after the Oil and Gas Regulatory Authority reviewed and adjusted consumer prices for petroleum products in view of recent fluctuations in the international oil market.

It said the new petrol price was Rs256.13 and that of HSD Rs263.95.

The prices of light diesel oil (LDO) and super kerosene oil were also reduced to Rs155.81 and Rs171.65, respectively, after cuts of Rs5.25 and Rs3.2.

Informed sources had previously said the ex-depot petrol price was estimated to go down by Rs2-2.50 per litre depending on final calculation on Feb 15 while HSD was expected to drop by about Rs9. Kerosene and LDO prices were estimated to fall by about Rs3.45 to Rs5 per litre.

The estimates for higher prices of petroleum products stemmed from a decline in the international market.

The benchmark Brent prices decreased by $2 per barrel last fortnight. These sources had said the average prices of HSD decreased by around $3 per barrel in the international market while that of petrol dropped by about 90 cents per barrel last fortnight. The ex-refinery cost of kerosene and LDO also came down. Import premium on petrol fell by $1 $7.75 per barrel from $8.8 while it remained unchanged on diesel.

As a result, the latest calculation as of February 29 showed around Rs9 per litre decrease in HSD rate, Rs2.50 per litre in petrol, Rs3.50 per litre in kerosene and about Rs5 per litre in LDO.

The ex-depot petrol price currently stands at Rs257.13 per litre, while that of HSD is Rs267.95 per litre. Kerosene’s official rate is Rs174.85 per litre but it is sold at Rs300-350 per litre.

Petrol is mainly used in private transport, small vehicles, rickshaws, and two-wheelers, and it directly affects the budget of the middle and lower middle classes.

Most of the transport sector runs on HSD. Its price is considered inflationary as it is primarily used in heavy transport vehicles, trains and agricultural engines like trucks, buses, tractors, tube wells and threshers and particularly adds to the prices of vegetables and other eatables.