Petrol, diesel prices hiked again, 14th time in 24 days
With the latest hike, pump prices of petrol and diesel in Delhi also made a new record of ₹93.68 per litre and ₹84.61 a litre, respectively
The upward surge in fuel rates continued unabated for the fourteenth time in 24 days as state-run retailers raised petrol price by 24 paise per litre and diesel by 29 paise on Thursday, making petrol costlier by ₹3.28 a litre and diesel by ₹3.88 since May 4, a day after results of five assembly polls were declared.
While prices of auto fuels are at record levels across the country, petrol price is just 6 paise away from touching the ₹100 per litre mark in Mumbai. Diesel is at ₹91.87 a litre in the financial capital. With the latest hike, pump prices of petrol and diesel in Delhi also made a new record of ₹93.68 per litre and ₹84.61 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.
Consumers in several cities and smaller towns, particularly in Rajasthan, Maharashtra and Madhya Pradesh, are paying more than ₹100 for one litre of petrol. Some of the cities selling the fuel over ₹100 per litre are Ratnagiri, Parbhani, Aurangabad, Indore, Bhopal, Gwalior, Jaisalmer, Ganganagar and Banswara.
Surging international oil rates and exorbitant domestic tax structure are two key reasons for high rates of petrol and diesel in pumps.
Benchmark Brent crude, which rose marginally by 0.32% to $68.87 a barrel on Wednesday, softened 0.6% on Thursday early trade at $68.46 per barrel. Indian fuel retailers align pump prices of petrol and diesel with their international benchmark rates of previous day. Even as international oil prices saw both upward and downward movements this month, pump rates of 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 a 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.
HT wrote on April 28 that fuel rates would incrementally move north after polls as state-run fuel retailers were losing about ₹3 a litre on fuel sales due to higher international oil rates at that time apart from depreciation of rupee against the dollar. India imports more than 80% of crude oil it processes and pays in dollar.
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.