Diesel nears ₹100 for first time, sells at ₹99.50/lt in Ganganagar
Auto fuel became costlier by 25 paise per litre on Wednesday, the 21st increase in 37 days, and pushed diesel rates close to ₹100 a litre for the first time in India as pumps in Rajasthan’s Ganganagar were selling diesel at ₹99.50 per litre and petrol at ₹106.64, the highest in the country.
The latest price increase made petrol costlier by ₹5.16 per litre and diesel by ₹5.74 across the country since May 4, a day after the results of assembly polls in four states and a Union Territory were declared.
It took auto fuel rates to another record across the country. Petrol in Delhi was sold at ₹95.56 per litre on Wednesday and diesel at ₹86.47 a litre. While fuel rates in Delhi are the benchmark for the entire country, retail prices of the two fuels differ from place to place because of variations in state taxes and local levies.
The unidirectional upward movement since May 4 led to petrol breaching the ₹100 mark in cities across the country, particularly in Maharashtra, Rajasthan, Andhra Pradesh, Madhya Pradesh and Karnataka.
Some of the cities where petrol is selling for over ₹100 per litre are Mumbai, Ratnagiri, Parbhani, Aurangabad, Jaisalmer, Ganganagar, Banswara, Indore, Bhopal, Gwalior, Guntur and Kakinada, Chikmagalur, Shivamogga.
Mumbai has the highest fuel rates among metros. Petrol is currently sold at ₹101.76 per litre in the financial capital and diesel at ₹93.85 a litre.
Surging international oil rates and exorbitant domestic tax structure are two key reasons for high rates of petrol and diesel.
Indian fuel retailers align pump prices of petrol and diesel with their international benchmark rates of the previous day. Benchmark Brent crude, which fell marginally by 0.56% at $71.49 per barrel on the first day of trade this week, firmed up by 1% on Tuesday at $72.22 a barrel and was hovering 0.57% up at $72.63 per barrel during the early trade on Wednesday.
Pump prices of fuels are also high because of taxes. In Delhi, central levies account for 34.8% of petrol price and state taxes, 23.08%, according to official data of June 1. On diesel, central taxes are over 37.24% while state taxes are about 14.64%. Through 2020, as global crude prices fell, the central government raised excise duty on the fuel to shore up its finances. States too followed suit -- with revenues hit on account of the pandemic.
Even as international oil prices saw volatility in the last one month, pump rates of auto fuels in India moved only in the upward direction. Even as Brent crude plunged to $65.11 on May 20, the lowest in these 34 days, petrol and diesel rates went up the next day by 19 paise per litre and 29 paise a litre.
According to executives working in state-run oil marketing companies, pump prices are also high because companies were recovering their past revenue losses like the one suffered for 66 days since February 27 when rates were not raised because of the assembly elections.
During the 66-day pause on the rate hike, state-run retailers also reduced petrol and diesel rates by 77 paise and 74 paise a litre. The entire gains to the consumers were quickly reversed in the first four rounds of rate hikes starting May 4.
The government deregulated the pricing of petrol on June 26, 2010, and diesel on October 19, 2014. Accordingly, state-run retailers are free to change pump prices every day. Public sector retailers — IOC, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd— control almost 90% of the domestic fuel retail market.