Fuel prices start seeing daily hikes again

The writing was on the wall and motorists in India were bracing for a price increase in petrol and diesel. They have not been disappointed. Two days after the results of the elections in four States – West Bengal, Kerala, Assam and Kerala – and the Union territory of Pondicherry were declared, oil marketing companies have hiked prices of the two fossil fuels. From end-March through to early May, prices were frozen, much to the relief of motorists.

• Petrol prices in Mumbai crosses Rs 97 mark (per litre)
• In Mumbai, petrol prices are just 45 paise short of all-time high Rs 97.57 price
• Diesel in Mumbai has crossed the Rs 88 mark (per litre)

Current petrol and diesel prices

Today is the second straight day of fuel price hikes, with petrol becoming costlier by 17 paise and diesel by 21 paise in Mumbai. Petrol now costs Rs 97.12 a litre, just Rs 2.88 shy of the Rs 100-a-litre mark, and tanking up on diesel will involve forking out Rs 88.19 a litre.

Today’s petrol price in Mumbai is just 45 paise short of the highest level the fuel had scaled – Rs 97.57 a litre on February 28, 2021.

Petrol and diesel prices over the last year

In the past 13 months, since the start of FY2020, when BS6 kicked in, petrol and diesel prices have jumped massively. The price data table below reveals just how much more motorists in Mumbai, Delhi, Chennai and Kolkata are paying to go the same distance.

Compared to April 1, 2020, diesel currently (in Mumbai) costs Rs 23 more per litre, indicating the rapid rise in price of diesel. This fuel is used by commercial vehicles crisscrossing the country transporting essential goods and, at present, life-saving oxygen cylinders.

Taxes make up for over 61 percent of retail petrol price and 56 percent of diesel. The retail price of the two fuels is made up of three components – base price that reflects the cost of international oil, central excise duty and state taxes. Both Central and State governments rely heavily on collections from taxes on these products for meeting their developmental and welfare priorities.

Global crude prices on the upswing

The rise of petrol and diesel prices is a direct impact of the marked increase in global crude oil prices, which in turn is a result of the key economies like the USA swinging back into work mode after the impact of the pandemic.

Given that Brent crude oil is trading at USD 69.39 a barrel today, do not expect fuel prices to come down any time soon. Today’s Brent crude oil price is a 277 percent increase over the $18.38 a barrel price on April 1, 2020 when the COVID-19 pandemic was peaking and transport and shipping operations worldwide were either in lockdown mode or minimal. However, the hapless Indian motorist never benefited from the record low prices of global crude oil either.

Also see:

Indian Oil rolls out 95 octane petrol

Indian Oil launches India’s first 100 octane petrol

10 most fuel-efficient petrol cars in India in 2021

EV prices to match petrol-diesel counterparts in the next two years: Nitin Gadkari