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Petrol prices close to ₹100-mark in Mumbai after 12th hike in 20 days
Petrol has, however, crossed the ₹100 mark in several cities and smaller towns, particularly in Rajasthan, Maharashtra and Madhya Pradesh.
After a day’s pause, fuel rates jumped again for the twelfth time in 20 days after petrol and diesel prices were raised by 17 paise and 27 paise a litre on Sunday respectively, making petrol costlier by ₹2.81 and diesel by ₹3.34 a litre since May 4. The hike has also driven the price of a litre of petrol one step closer to Rs100 mark in Mumbai.
Petrol's price in Mumbai has reached ₹99.49 per litre, while the pump price of diesel in the financial capital is now ₹91.30 a litre. Fuel rates are costliest in Mumbai among the major metros. In national capital Delhi, Petrol price surged to ₹93.21 per litre and diesel to ₹84.07 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.
Petrol has, however, crossed the ₹100 mark in several cities and smaller towns, particularly in Rajasthan, Maharashtra and Madhya Pradesh. Some of the cities selling the fuel over ₹100 per litre include Ratnagiri, Parbhani, Aurangabad, Indore, Bhopal, Gwalior, Jaisalmer, Ganganagar and Banswara.
Retail prices of petrol and diesel are moving up despite a fall in international oil prices this week. Benchmark Brent crude fell by over 4.34% on Friday at $66.44 per barrel from $69.46 a barrel on Monday. State-run fuel retailers align fuel prices in India with international rates on the previous day.
There are two key reasons for higher petrol and diesel rates – taxes on auto fuels and a spike in international oil prices. To be sure, much of the retail price is taxes. For instance, in Delhi, on May 16, central taxes accounted for 35.5% of petrol’s price, and state taxes, 23%. On diesel, central levies 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.
International oil prices and rupee-dollar exchange rate impact domestic pump prices as India imports over 80% crude oil it processes and pays in dollar. Brent crude closed 2.04% up at $66.44 a barrel on the last trading day (Friday) this week.
According to executives working in state-run oil marketing companies, pump prices are also high because companies are recovering their past revenue losses like the one suffered for 66 days since February 27 when prices 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 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.
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.
