Petrol, diesel prices up for 7th time in 8 days

New Delhi: Petrol prices in the national capital as well as most state capitals crossed Rs100 a litre mark as its rates on Tuesday were hiked by 80 paise a litre and that of diesel by 70 paise, taking the total increase since last week to Rs4.80 per litre. Petrol in Delhi will now cost Rs100.21 per litre against Rs99.41 previously, while diesel rates have gone up from Rs90.77 per litre to Rs91.47, according to a price notification of state fuel retailers. Rates have been increased across the country and vary from state to state, depending upon the incidence of local taxation. Mumbai, Chennai and Kolkata already had petrol prices of over Rs100 per litre, and most state capitals now have rates higher than that.

Finance Minister Nirmala Sitharaman on Tuesday defended the 137-day hiatus in fuel price revision, saying the disruption in supply chains and the resultant increase in global oil prices due to the war in Ukraine was a 'couple of weeks' phenomenon resulting in the record hike in petrol and diesel prices in last 8 days.

Petrol price in the national capital had last crossed Rs100 a litre mark on July 7, 2021, and went on to touch an all-time high of Rs110.04 before the Modi government on November 4 reduced excise duty on auto fuels. Most states matched that cut with a reduction in local sales tax or VAT. Post that daily rate revisions were put on hold as elections in five states, including Uttar Pradesh, approached. But, the crude oil price during this period climbed from $82 per barrel to close to $140 before retracting. It is around $ 112 per barrel on Tuesday. This is the seventh increase in prices since the ending of a four-and-half-month long hiatus in rate revision on March 22. On the first four occasions, prices were increased by 80 paise a litre - the steepest single-day rise since the daily price revision was introduced in June 2017.

On the following days, petrol price went up by 50 paise and 30 paise a litre, while diesel rose by 55 paise and 35 paise a litre. In all, petrol and diesel prices have gone up by Rs 4.80 per litre - the steepest increase in any eight days since the daily price revision was implemented in June 2017. In Mumbai, petrol comes for Rs 115.04 a litre, while in Chennai, it is priced at Rs 105.94 and in Kolkata at Rs 109.68. Diesel is priced at Rs 99.25 a litre in Mumbai, Rs 96 in Chennai and Rs 94.62 in Kolkata. Rajasthan's Ganganagar district on the border with Pakistan has the costliest fuel in the country at Rs 117.14 per litre for petrol and Rs 99.96 for diesel.

Besides local taxes, rates are also dependent on freight. Moody's Investors Services last week stated that state retailers together lost around $ 2.25 billion (Rs 19,000 crore) in revenue for keeping petrol and diesel prices on hold during the election period. Oil companies "will need to raise diesel prices by Rs 13.1-24.9 per litre and Rs 10.6-22.3 a litre on gasoline (petrol) at an underlying crude price of $100-120 per barrel," according to Kotak Institutional Equities. CRISIL Research said a Rs 9-12 per litre increase in retail price will be required for a full pass-through of an average $100 per barrel crude oil and Rs 15-20 a litre hike if the average crude oil price rises to $110-120. India is 85 per cent dependent on imports for meeting its oil needs and so retail rates adjust accordingly to the global movement.