Petroleum consumption (gasoline and HSD) in the fiscal year to date has come down 19 percent year-on-year. Petrol sales have dropped more drastically than HSD and understandably so, given the difference in use cases, and limited capacity to pass on the cost versus that of HSD.

On a 12-month moving average, petrol sales have nosedived rather sharply in the past five months – coinciding with the meteoric rise in pump prices. This is the lowest that monthly consumption on trailing average has been on the trendline, dating back 13 years.

HSD’s rise, on the other hand has been steadier over the last decade – and the recent slide is nowhere near the dips witnessed in the economic slowdown of FY19 and then Covid. But the cracks have only started to emerge, and HSD consumption could be tested to the hilt in the coming months, as businesses struggle to stay afloat, and the authorities are running pillar to post to curb imports.

For 19 percent lower consumption year-on-year, consumers have paid 53 percent more for petrol and HSD during July-November 2022. In the calendar year so far, 51 percent more has been spent on HSD and petrol for 6 percent lesser consumption. These are staggering numbers and go on to explain why goods’ prices will likely remain elevated, even if there is an unlikely reversal in petroleum prices.

The government has so far managed to collect close to Rs165 billion in five months of FY23 in lieu of Petroleum Levy. This is four times higher year-on-year, and the government could well expect to fetch close to Rs500 billion by the end of FY23 – should there not arise another political need of freezing consumer prices towards the end of fiscal year, close to the general elections. The pace on HSD PL collection is expected to rise in 2HFY23, as the PL on HSD is only half way there from the maximum limit, to be reached by April 2023, as agreed with the IMF.