Diesel price crosses ₹99/l in Mumbai after latest fuel price hike

Petrol and Diesel prices were hiked on Tuesday, sending retail rates to all-time high levels, with a substantial increase expected in coming days as international oil prices touched seven-year high

Price of a litre of diesel crossed ₹99 in Mumbai on Wednesday, an all time high, and was selling at ₹99.17 a litre, while price of one litre of petrol inched closer to ₹109 mark at retail fuel outlets in the city following an increase of 37 paise and 29 paise/litre respectively. On Tuesday, before the hike, one litre of petrol was priced at ₹108.67 while a litre of diesel was available at ₹98.80 in Mumbai.

International oil rates, which are often volatile, directly influence the retail prices of petrol and diesel in India. (Bloomberg)

In Thane, a litre of petrol was available at ₹109.10 and a litre of diesel was priced at ₹99.31 following the hike on Wednesday. In Maharashtra’s Parbhani, a litre of petrol was being sold at ₹111.52 and in Amravati, diesel was available at ₹100.72 a litre.

Petrol and Diesel prices were hiked on Tuesday, sending retail rates to all-time high levels, with a substantial increase expected in coming days as international oil prices touched seven-year high.

State-owned fuel retailers have in the past few days resorted to modest increases to align domestic rates with cost. But with international benchmark Brent crude soaring to 82.37 $ a barrel as a result of the decision by OPEC+ not to increase output more than 0.4 million barrels per day, fuel rates are likely to rise even further.

Global oil prices are also rising because of rapid demand recovery due to easing of pandemic restrictions and improving vaccination rates. International oil rates, which are often volatile, directly influence the retail prices of petrol and diesel in India. Heavy loads of central and state taxes are also responsible for astronomically high rates.

Through 2020, as global crude prices plunged (below $20 a barrel in April last year), the central government raised excise duty on fuel to shore up its finances. States, too, followed suit as their revenues were hit on account of the Covid-19 pandemic. As a result, the central and state levies on petrol and diesel are over 50% of their retail prices.