Prices have been rising mainly on the hefty taxes recently imposed by the Union and state governments.

Retail diesel price in Delhi set a new daily record high for the third straight day with the fuel costing Rs 77.06/litre on Friday. With rates of auto fuels being raised for the 13th day in a row, price of diesel in Delhi crossed Rs 77/litre mark for the first time in history. It rose to an all-time high of Rs 75.79/litre on Wednesday, breaking the earlier record of Rs 75.69/litre in October, 2018.

Petrol, on Friday, cost Rs 78.37/litre in the national capital which is still lower than its highest of Rs 84/litre on October 4, 2018. Prices are high even though current rate of $41.2/barrel for Indian basket of crude is about half of October 2018 levels.

Auto fuel rates have been rising continuously since June 6, when diesel and petrol were priced Rs 69.39/litre and Rs 71.26/litre, respectively. Prices have been rising mainly on the hefty taxes recently imposed by the Union and state governments. State-run oil-marketing companies (OMCs) are now seeking to revive their marketing margins, which had taken a hit after prices remained unchanged for about a month to accommodate the sharp Rs 10-13/litre rise in central government’s auto fuel taxes in early May.

Diesel prices are high also because the Delhi government, taking a cue from the Centre, had also increased the value added tax on diesel to 30% from the previous rate of 16.8%. Analysts have pointed that prices will likely rise further as global crude rates are gradually rising. Of the retail diesel rates, excise duty comprise about 42% and state VAT another 23%. The base price of diesel charged by OMCs had increased to Rs 22.93 on June 16 from Rs 18.49 on June 1.