Fuel price rally continued unabated for the 24th time in 42 days as state-run oil companies raised petrol by 29 paise per litre and diesel by 30 paise on Monday, taking pump rates to yet another record in the country.
Both petrol and diesel rates have crossed the ₹100 mark in several cities as highest fuel rates are recorded in Rajasthan’s Ganganagar, where petrol is sold at ₹107.53 per litre and diesel at ₹100.37 a litre on Monday.
The latest hike has made petrol costlier by ₹6.01 per litre and diesel by ₹6.55 across the country since May 4, a day after results of five assembly polls were declared.
Petrol in Delhi is now sold at ₹96.41 per litre and diesel at ₹87.28 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.
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{{/usCountry}}Petrol price is also inching towards the ₹100 mark in Bengaluru as the fuel is now sold at ₹99.63 a litre, the second-highest among the five metros after Mumbai. The financial capital has the highest fuel rates among metros where petrol is currently sold at ₹102.58 per litre in Mumbai and diesel at ₹94.70 a litre.
The unidirectional upward movement Since May 4 saw petrol breaching ₹100 mark in various cities across the country, particularly in Maharashtra, Rajasthan, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana and Ladakh.
Some of the cities selling petrol for over ₹100 per litre are Mumbai, Ratnagiri, Parbhani, Aurangabad, Jaisalmer, Ganganagar, Banswara, Indore, Bhopal, Gwalior, Guntur, Kakinada, Chikmagalur, Shivamogga, Hyderabad and Leh.
Surging international oil rates and exorbitant domestic tax structure are two key reasons for high rates of petrol and diesel in pumps.
Indian fuel retailers align pump prices of petrol and diesel with their international benchmark rates of previous day. Benchmark Brent crude that closed 0.23% up at $72.69 on Friday, jumped 34 cents or 0.47% to cross $73 a barrel mark on Monday early trade.
Pump prices of fuels are also high because of taxes. In Delhi, central levies account for 34.8% of petrol’s price and state taxes, 23.08%, according to an 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. For instance, despite Brent crude had 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 respectively.
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 assembly elections in four states and one Union Territory.
During the 66-day pause on rate hike, state-run retailers had also reduced petrol and diesel rates by 77 paise and 74 paise a litre, respectively in four small steps. But, the entire gains to the consumers were quickly reversed in the first four consecutive rounds of rate hikes starting from 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 (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL)— control almost 90% of the domestic fuel retail market.