Petrol costlier by ₹6.26/litre and diesel by ₹6.68/litre since May 4
Fuel prices rose for the 25th time in 44 days as state-run oil companies raised the price of petrol by 25 paise per litre and diesel by 13 paise per litre on Wednesday, setting another price record.
Both petrol and diesel rates crossed the ₹100 mark in several cities as the highest fuel rates were recorded in Rajasthan’s Ganganagar on Wednesday-- petrol is priced at ₹107.79 per litre and diesel at ₹100.51 a litre.
The latest hike has made petrol costlier by ₹6.26 per litre and diesel by ₹6.68 across the country since May 4, a day after the results of five assembly polls were declared.
Petrol in Delhi is now sold at ₹96.66 per litre and diesel at ₹87.41 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 price of petrol is also inching towards the ₹100 mark in Bengaluru as the fuel is now sold at ₹99.89 a litre, the second-highest rate among the five metros after Mumbai. The financial capital of Mumbai has the highest fuel rates among metros, where petrol is currently sold at ₹102.82 per litre and diesel at ₹94.84 a litre.
The unidirectional upward movement since May 4 saw petrol breaching the ₹100 mark in various cities across the country, particularly in Maharashtra, Rajasthan, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana and Laddakh.
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 structures 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 at $73.99 on Tuesday, jumped 0.97% on Wednesday early trade at $74.71 a barrel.
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 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)— controls almost 90% of the domestic fuel retail market.