Petrol became costlier by 3.83/lt, diesel by ₹4.42/lt in May
Auto fuel rates continued to surge unabated for the sixteenth time in May as state-run retailers hiked petrol prices by 29 paise per litre and diesel by 26 paise a litre on Monday.
Petrol is now costlier by ₹3.83 per litre and diesel ₹4.42 a litre across the country since May 4, a day after results of five assembly polls were declared.
The unidirectional upward movement this month saw petrol breaching ₹100 mark in various cities across the country, particularly in Maharashtra, Rajasthan, Andhra Pradesh and Madhya Pradesh.
Some of the cities selling the fuel for over ₹100 per litre are Mumbai, Ratnagiri, Parbhani, Aurangabad, Jaisalmer, Ganganagar, Banswara, Indore, Bhopal, Gwalior, Guntur and Kakinada.
While petrol and diesel are being sold at record rates across the country, Mumbai has the highest rates among metros.
Petrol is currently sold at ₹100.47 per litre in the financial capital and diesel at ₹92.45. Pump prices of petrol and diesel in Delhi on Monday also made a new record of ₹94.23 per litre and ₹85.15 a litre, respectively.
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.
Surging international oil rates and exorbitant domestic tax structure are the two key reasons for high rates of petrol and diesel in pumps.
Benchmark Brent crude rose marginally by 0.55% to $69.10 a barrel on Monday morning. Indian fuel retailers align pump prices of petrol and diesel with their international benchmark rates of previous day. Even as international oil prices saw volatility in May, pump rates of auto fuels in India moved only in the upward direction.
Pump prices of fuels are also high because of taxes. In Delhi, central levies account for 35.5% of petrol’s price and state taxes, 23%, according to an official data of May 16. On diesel, central taxes are over 38.2% while state taxes are about 14.6%. 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.
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.