Fuel prices rise again, petrol tops ₹99 in Delhi
NEW DELHI: Petrol and diesel prices rose again on Sunday, with oil marketing companies (OMCs) increasing the price of petrol by 50 paise and diesel by 55 paise.
This is the fifth hike in prices in six days after daily price revision of retail fuels started on March 22. Since then, petrol prices in Delhi have increased by ₹3.7 a litre to ₹99.11, while that of diesel has increased by ₹3.75 per litre to ₹90.42.
Revision of fuel prices was halted for more than over four months since November, though crude oil prices surged more than $40 per barrel since then. Given the large gap in crude oil prices and retail fuel rates, experts feel this price rise is here to stay.
A report by Moody’s Investor Services said that state-owned refining and marketing companies together have lost around $2.25 billion (₹19,000 crore) in revenue on petrol and diesel sales.
Further, a recent ICRA report suggested that graded price increases of auto fuels would prolong losses for OMCs.
The increase in retail prices have, however, fuelled inflationary worries, which may eventually hurt growth. If the price of the Indian crude basket increases by $25 per barrel, reference to a base of $75 per barrel, retail inflation may increase by 100 basis points, according to experts.
India is already witnessing a high inflation rate. The Consumer Price Index (CPI) inflation came in at 6.07% in February 2022, according to data released by the National Statistical Office (NSO).
The rise in global energy prices, crude oil and natural gas, have led to prices of retail transport fuels, liquified petroleum gas (LPG), compressed natural gas (CNG), and piped natural gas (PNG) in the past one week.
On March 22, OMCs raised the prices of non-subsidized domestic cooking gas cylinders by Rs50 after a gap of more than five months. In Delhi, the 14.2-kilogram non-subsidized LPG cylinder now costs ₹949.50.
Indraprastha Gas Ltd (IGL) on March 24 increased prices of CNG and PNG in Delhi and other cities in the National Capital Region. The CNG price in Delhi was increased by ₹1 per kg to ₹59.01 per kg and the prices of PNG by ₹1 standard cubic meter (SCM) to ₹36.61 per SCM in Delhi.
Crude oil prices, which have largely been on the upside amid the Russia-Ukraine conflict are expected to stay volatile.
On Friday, the May contract of Brent futures on the Intercontinental Exchange closed at $120.65, higher by 1.36% from its previous close. The May contract of West Texas Intermediate on the NYMEX rose 1.39% to $113.90 per barrel.
Fuel prices have been largely on the upside since Russia invaded Ukraine on February 24. On March 7, Brent had touched $139.13 per barrel, the highest since 2008.
High crude oil prices impact India’s economy as the country imports about 85% of its energy requirements. The Indian energy basket was last recorded at $117.71 per barrel on March 24, according to data from the petroleum planning and analysis cell of the ministry of petroleum and natural gas.