Government Maintains Fuel Prices While Increasing Petroleum Levy

The federal government announced that fuel prices will remain unchanged for the next fortnight, despite a decline in international oil prices. In a simultaneous move, authorities increased the Petroleum Levy (PL) on several products to bolster state revenue. The levy on petrol and High Octane Blending Component (HOBC) has been raised by Rs4.62 per litre, bringing the total PL for these fuels to Rs84.27 per litre. High-speed diesel (HSD) saw a smaller levy increase of Re0.80, bringing its total to Rs76.21 per litre.

As a result of this adjustment, the price of petrol remains at Rs253.17 per litre, and HSD stays at Rs257.08 per litre until at least January 31. This decision has effectively absorbed the “relief” consumers expected from the global drop in crude prices, which are currently hovering around $59–$60 per barrel. Additionally, the government continues to collect a Climate Support Levy (CSL) of Rs2.50 per litre on all major fuel types, alongside existing freight margins and dealer commissions.

Industry analysts suggest that by keeping retail prices steady while jacking up levies, the government is prioritizing fiscal revenue targets and addressing circular debt over direct consumer relief. While this stability provides some predictability for the transport and agriculture sectors, it continues to place a heavy burden on middle- and lower-income households. Commuters using motorcycles and small vehicles had hoped for a price cut following the significant reduction seen at the start of the year, but those gains have now been offset by the new tax measures.

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