Petrol prices below Rs 80 mark, diesel continues to pinch

NAGPUR: Fall in crude prices has brought petrol rates in city below Rs80 a litre after a gap of eight months. On Wednesday, petrol in the city cost up to Rs79.72 a litre, varying slightly between outlets in different localities. This brings the rates back to the level seen in February this year. Diesel, however, continues to be costlier if rates between the two periods are compared.

At Rs79.72 per litre, petrol rates on Tuesday are almost at the same level as February 28, when petrol cost Rs79.86. Diesel on the other hand, which cost Rs72.34 on Tuesday, was cheaper by Rs5.63 on February 28.

Trade sources say that even the gap between petrol and diesel rates has narrowed over a period of time. If compared on yearly basis, petrol on Tuesday was up by Rs2, as against rates on the same day last year. However, diesel is dearer by Rs10 on similar comparison.

A private analyst explained that this can be because of increase in ‘crack spread’ between crude and diesel prices. This is the term used for measuring the difference between two prices. The crack spread increases, especially in winter season, because the demand for diesel increases, said the analyst, who does not wish to be named.

The upward movement in fuel prices accelerated after March this year, finally touching a peak of Rs92 per litre of petrol on October 4. There were fears that it may even touch Rs100, leading to widespread discontent.

On October 5, the centre cut VAT by Rs2.5, nudging the states to implement a similar reduction. This straightaway brought down the rates to Rs87.45 and Rs77.97 a litre for petrol and diesel respectively.

A day later, the rates inched up, but the reverse trend began by October third week. Since then, the petrol rates have come down by Rs7.6. Diesel has become cheaper by Rs5 a litre. If compared to last two months, the reduction is of Rs11.95 and Rs8.01 for petrol and diesel respectively, said market sources.

Kukku Marwah of Nagpur Truckers Unity, a transporters guild, said diesel prices continue to be unviable for the industry. Ideally, diesel should cost Rs45 a litre. Business is down since GST and note ban times, he said.