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Petrol jumps 35 paise/litre, but diesel price remains unchanged
The 35th price hike in two months has made petrol costlier by ₹9.46 per litre since May 4, a day after results of five assembly polls were declared
State-run fuel retailers on Monday raised petrol prices by 35 paise per litre, but did not the price of diesel, thus decoupling the synchronous movements of the two fuel rates for the second time in two months.
The 35th price hike in two months has made petrol costlier by ₹9.46 per litre since May 4, a day after results of five assembly polls were declared. Although diesel rates remained unchanged on Monday, they rose by ₹8.63 per litre in the last two months.
With the latest hike, petrol rates in Delhi and Kolkata have come close to the ₹100 mark. Petrol in Delhi is priced at ₹99.86 per litre and ₹99.84 per litre in Kolkata.
While fuel rates of state-run Indian Oil Corporation (IOC) 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.
Petrol has, however, crossed the ₹100 mark in three metros -- Mumbai, Chennai and Bangalore. The financial capital on Monday priced petrol at ₹105.92 per litre.
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The highest fuel rates have been recorded in Rajasthan’s Ganganagar where pumps are selling petrol at ₹111.14 per litre and diesel at ₹102.60 a litre.
The unrelenting upward movement of fuel rates since May 4 already saw petrol crossing ₹100 mark in various cities across the country, particularly in states and UTs of Maharashtra, Rajasthan, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Odisha, Manipur, Jammu & Kashmir, Ladakh, Punjab, Bihar, Kerala, Tamil Nadu and West Bengal.
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, Leh, Imphal, Kalahandi, Sopore, Baramulla, Patna, Salem, Thiruvananthapuram, Mohali and Darjeeling.
Surging international oil rates and exorbitant domestic tax structure are two key reasons for high rates of petrol and diesel in pumps. Domestic fuel retailers align pump prices of petrol and diesel with respective international benchmarks of previous day, which often move in tandem with crude oil rates.
International oil prices soared on Friday – the last trading day of the previous week -- after producers’ cartel – the Organisation of the Petroleum Exporting Countries and its allies, including Russia (together known as OPEC+) – on Thursday decided to restore less than expected supply even as global oil demand is growing. Benchmark Brent crude that had gained 0.44% on Friday close at $76.17 per barrel, the highest since October 2018, lost steam on Monday. Brent fell 0.14% at $76.06 a barrel on Monday early trade.
Exorbitant taxes are the other reason for high prices of auto fuels in the country. In Delhi, central levies account for 33.29% of petrol’s price and state taxes, 23.07%, according to an official data of July 1. On diesel, central taxes are over 35.66% while state taxes are about 14.62%. 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 since May 4, 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 46 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 politically sensitive 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.
