Diesel at record high as fuel rates see another hike

THIS WAS THE FIFTH DIESEL PRICE HIKE IN SEVEN

DAYS THAT PUSHED UP THE PRICE BY ₹1.25 PER LITRE

NEW DELHI: Diesel prices once again scaled to a record high of ₹89.87 per litre in Delhi on Thursday after state-run fuel retailers raised the rate by 30 paise per litre. Petrol rates, too, were raised by 25 paise per litre, pushing up the retail price in the capital to ₹101.64 a litre.

This was the fifth diesel price hike in seven days that pushed up the price by ₹1.25 per litre, and the second petrol price hike in three days.

While the benchmark automobile fuel prices for the country are set by the Indian Oil Corp. Ltd (IOCL) in Delhi, retail prices vary from place to place due to local levies. The domestic rates of petrol and diesel continue to soar even as international crude oil prices retreated marginally from the $80 a barrel mark it had achieved during Tuesday. Benchmark Brent crude on Thursday opened at $78.46 a barrel, down by 0.23%.

An executive working in a public sector oil company said on condition of anonymity that fuel retailers calibrated raising the domestic rates of petrol and diesel even as international oil prices saw a northward movement from mid-september and breached the $80 a barrel mark. “Companies are recovering past dues as the full impact of international oil price hike was not immediately passed on to the customer,” he said, on condition of anonymity.

State-run oil refiners are cautiously watching the international oil price movement, which is volatile and expected to move up further due to the rising demand and continued supply squeeze by the oil cartel—the Organisation of the Petroleum Exporting Countries and its allies, including Russia (together known as Opec+).

Petrol rates started going up again on Tuesday, 72 days after reaching the all-time high of ₹101.84 per litre on July 17. But diesel price hike started from last Friday, 70 days after achieving the record high of ₹89.87 a litre on July 15.

Prices are also moving up because the rupee is depreciating against the dollar, which makes imports costlier, the executive said. India imports more than 80% of crude oil it processes and pays in US dollars. Customers should not expect any instant relief as fuel prices may not soften immediately, the executive said.

Before the recent rally, oil companies had cut rates in small doses by 65 paise per litre (petrol) and ₹1.25 (diesel) between mid-august and early September because of international crude oil prices plunging to $68.23 per barrel on August 18.

According to the International Energy Agency and Opec, global demand is expected to outpace supply due to which global oil prices will likely remain firm in the near to mid-term.