Fuel prices soar again as petrol to now cost ₹92.34/l, diesel ₹82.95/l
NEW DELHI: The upward movement of petrol and diesel rates resumed on Friday after a day’s pause as pumps hiked prices by 29 paise and 34 paise per litre, respectively.
With the latest price revision, the eighth hike since May 4, petrol prices rose to ₹92.34 per litre and diesel to ₹82.95 per litre in the national capital.
While fuel rates in Delhi serve as a benchmark for the entire country, retail prices vary from place to place because of variations in state taxes and local levies.
Petrol prices have already crossed the ₹100 per litre-mark in several states such as Ganganagar (Rajasthan), Indore (Madhya Pradesh), and Parbhari (Maharashtra).
To be sure, much of the retail price is taxes. For instance, in Delhi, on May 14, central taxes accounted for 36.4% of petrol’s price, and state taxes, 23%.
For diesel, central levies are over 39% while state taxes are about 15%. Through out 2020, as global crude prices fell, the Central government raised excise duty on the fuel to shore up its finances. The states followed suit as revenue took a hit on account of the Covid-19 pandemic.
State-run oil marketing companies raised auto fuel rates on Friday despite benchmark Brent crude dropping by 3.27% at $67.05 per barrel on Thursday. It further fell by over 0.5% during the intraday trade on Friday.
Retail prices of petrol and diesel in India are aligned with their international rates of the previous day. The average exchange rate for import of crude oil has also been stable at around ₹73.45 per dollar in the last three days.
According to executives working in state-run oil marketing firms, there are two reasons for the recent spike in auto fuel prices – high international oil rates and recovery of past revenue losses that companies had incurred for keeping any upward price movement of the two politically sensitive fuels under pause for 66 days since February 27 because of assembly elections in four states and one Union Territory.
During the 66-day pause on rate hike, state-run retailers reduced petrol and diesel rates by 77 paise and 74 paise a litre, respectively, in four small doses. But, the entire gains to the consumers were quickly reversed in the first four consecutive rounds of rate hikes starting from May 4.
HT wrote on April 28 that fuel rates would move north after polls and their pump prices would start seeing small increments as staterun fuel retailers had been losing about ₹3 a litre on sale of the fuel because of higher international oil rates and depreciation of rupee against the dollar.
Fuel rates in India are also high because of high central and state taxes. Given the parlous state of the economy it is unlikely that those will be reduced. Indeed, the Centre’s move to raise excise even as global oil prices crashed last year, helped boost government revenues.