Diesel price crossed the ₹100 per litre mark for the first time in Mumbai on Saturday, highest in metros, as state-run oil marketing companies again raised petrol rates by 30 a litre and diesel by 35 paise even as India’s average crude oil import price softened marginally by 2.47% from a seven-year peak of ₹6,026.47 a barrel on Wednesday.
After the 10th hike in the last two weeks, on Saturday, petrol became costlier by ₹2.65 per litre while diesel soared by ₹3.85 a litre (the 13th rate hike since September 24). Consequently, petrol is now priced at ₹109.83 per litre across Mumbai pumps and diesel at ₹100.29.
Pump rates of petrol and diesel in Delhi also made another fresh record at ₹103.84 a litre and ₹92.47, respectively. While the benchmark automobile fuel prices for the country are set by the Indian Oil Corporation (IOC) in Delhi, retail prices vary from place to place due to local levies.
The highest fuel rates are often recorded in Rajasthan’s Ganganagar because of a high incidence of 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, directly influence the retail prices of petrol and diesel in India.
Benchmark Brent crude on Friday closed 0.54% up at $82.39 a barrel, which was its three-year high. It had surged to $82.56 on Tuesday (October 5) after producers’ cartel – the Organisation of the Petroleum Exporting Countries and its allies (together known as OPEC+) – on Monday rejected the pressure from oil consumers to ramp up output to meet surging demand beyond what it had already planned in July.
Heavy loads of central and state taxes are also responsible for astronomically high fuel rates. At present, the central and state levies on petrol and diesel are about 50% of their retail prices. According to IOC data, the pump price of petrol in Delhi has about 32.3% central excise component and 23% state levy (VAT). Central tax on diesel is about 35.2% of its retail price, while the VAT component is 14.62%.
Throughout 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 their revenues were hit on account of the Covid-19 pandemic.
India: Diesel rates cross ₹100 mark in Mumbai, highest among metros