Consumers are likely to get a welcome relief at the start of 2026, as petroleum prices are projected to drop across the board from January 1. Petrol prices are expected to fall by up to Rs10.60 per litre, while diesel, kerosene oil, and light diesel oil (LDO) are also expected to see significant reductions.
At the ex-depot level, petrol may decline from Rs263.45 to Rs252.85 per litre, and diesel prices are projected to drop from Rs265.65 to Rs257.06 per litre. Similarly, kerosene oil and LDO prices are expected to fall, providing broad-based relief to households and businesses.
At the ex-refinery level, petrol prices are likely to decrease from Rs156.66 to Rs146.06 per litre, while high-speed diesel (HSD) — widely used in freight transport, public buses, agriculture machinery, and power generation — is expected to fall from Rs164.92 to Rs156.33 per litre. Kerosene oil may decline by Rs8.92 per litre, and LDO by Rs6.62 per litre.
The anticipated reduction in fuel prices is expected to directly benefit motorists, public transport users, and industrial consumers, while easing inflationary pressures by lowering freight and logistics costs. Diesel, in particular, is a critical input for agriculture and the transport sector, making its price cut significant for overall commodity prices.
Petrol remains the most visible fuel for urban households, powering private vehicles and motorcycles. Kerosene oil is predominantly used by low-income households in remote areas for cooking and lighting, while LDO serves industrial units, agricultural operations, and backup power generators, especially in areas facing electricity shortages.
The final fuel prices for January 1, 2026, will be announced after the government completes its pricing review and adjusts applicable taxes and levies. If implemented, the projected reductions will mark a positive start to the new year, offering meaningful consumer relief and easing operational costs across key economic sectors.
