State-run oil marketing companies (OMCs) raised the prices of petrol and diesel on Tuesday for the 17th day in a row, taking the rates of the two auto fuels to their highest in months.
Petrol price was increased by 20 paise a litre and will cost Rs 79.76 and diesel by 55 paise to sell at record Rs 79.40 per litre in Delhi.
Price of petrol has seen a record surge of Rs 8.50 per litre in about a fortnight since June 7 and diesel by Rs 10.01 a litre. State-owned oil marketing companies returned to daily reviews from June 7 following an 82-day gap.
Petrol and diesel prices are going up in tandem with their rates in the international oil markets, executives of the oil marketing companies have said. Retail rates of auto fuels vary from state to state due to wide differences in local levies.
The current prices of petrol and diesel are close to the level of October 2018, when India’s average cost of international crude oil import was around $80 per barrel compared to current average import price of $40.06 a barrel, according to petroleum ministry’s data keeper Petroleum Planning and Analysis Cell (PPAC).
Domestic consumers have seen a sustained spike in petrol and diesel rates as global oil prices started moving north after the producers’ cartel—the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, particularly Russia (together OPEC+)—on June 6 decided to extend record output cuts by one more month till the end of July.
The government hiked levies that kept retail prices of the two fuels more or less unchanged and despite global crude oil prices plunging in April and remaining low in May, they did not help Indian consumers because.
Daily price revisions were suspended and retail rates were frozen on March 16, 2020, and they remained unchanged till June 6.
State-run retailers enjoy pricing freedom and align domestic retail prices of the fuels on the basis of their international rates. The government had deregulated pricing of petrol on June 26, 2010, and diesel on October 19, 2014.
the Union government had raised excise duties on petrol and diesel twice—first by Rs 3 per litre each and later by Rs 10 a litre on petrol and Rs 13 on diesel—taking advantage of subdued global oil prices.
A Re-1 per litre hike in excuse duty meant an additional Rs 14,500 crore revenue to the exchequer.
States have also raised value-added tax (VAT) on petrol and diesel since mid-March.