Diesel crosses ₹100/litre mark in Mumbai; 10th price hike in two weeks

Diesel is now costlier by 35 paise per litre and petrol by 30 a litre, even as India’s average price of crude oil import softened marginally by 2.47% from a seven-year peak of ₹6,026.47 a barrel on Wednesday

The price of diesel crossed ₹100 a litre for the first time in Mumbai, the highest in metro cities, as state-run oil marketers again raised rates of auto fuels on Saturday.

Motorists at a fuel station in Mumbai. The price of diesel crossed ₹100 a litre for the first time in Mumbai after 10th price hike in two weeks, and the 13th since September 24. (HT Photo)

Diesel is now costlier by 35 paise per litre and petrol by 30 a litre, even as India’s average price of crude oil import softened marginally by 2.47% from a seven-year peak of ₹6,026.47 a barrel on Wednesday. This is the 10th hike in two weeks, and the 13th since September 24.

Petrol is selling in Mumbai pumps at ₹109.83 per litre and diesel at ₹100.29. Pump rates in Delhi also touched a fresh record at ₹103.84 a litre and ₹92.47 for petrol and diesel, respectively. While the benchmark automobile fuel prices are set by the Indian Oil Corporation (IOC) in Delhi, retail prices vary due to local levies.

The highest fuel rates are often recorded in Rajasthan’s Ganganagar because of high local levies. Petrol is now sold at ₹115.86 per litre and diesel at ₹106.48 in Ganganagar.

International oil rates, which are often volatile, influence retail prices of petrol and diesel in India.

Benchmark Brent crude on Friday closed 0.54% up at $82.39 a barrel, a three-year high. It had surged to $82.56 on October 5 after the Organisation of the Petroleum Exporting Countries, a producers’ cartel, and its allies on Monday rejected pressure from consumers to increase output to meet surging demand beyond what it had already planned in July.

Heavy central and state taxes are also responsible for astronomical fuel rates. At present, the central and state levies on petrol and diesel are about 50% of their retail prices. Pump price of petrol in Delhi has about a 32.3% central excise component and a 23% state levy, or value-added tax (VAT), IOC data show. Central tax on diesel is about 35.2% of its retail price, while the VAT component is 14.62%.

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 revenues were hit due to the Covid-19 pandemic.

The petroleum sector contributed ₹371,726 crore to central excise revenue in 2020-21, and ₹202,937 crore state levies, official data show.